Landlord Thread - First Time Buyer

Okay Veeky Forums, I'm 21, just graduated and got myself a job and currently working out where is best to invest my money once I've started earning.

Here is a plan I've been thinking about to invest in property, in about two years hopefully...

>Sister and I thinking about joint mortgage, £100k-£120k potential.
>Get 4 bedroom house and rent out two rooms to friends.
>Each end up paying £400 per month and within 5 years mortgage is paid off.
>After 5 years passive income from rent, owned property. Sister and I split earnings, move out and rent the other two rooms. £800 a month passive income.

>Get own personal mortgage after 5 years with hopefully higher salary and £9.6k passive income and buy another 4 bedroom house. Rent out three rooms and repeat the process.
>Another 5 years and I will have two properties, 6 rooms rented out generating £2.4k per month of passive income. That's £28.8k annually.

>Will be 31-33 by then, and will want to settle down and start a family. £2.4k per month coming in, would pay for a nice mortgage on a big house (I'd love to move to America and live in the suburbs. Britbong here)

Is this an impractical idea? The math adds up to me, but I am not from a wealthy family. No inheritance to spent. Just the sweat off my own back.

I haven't got a penny in the bank but I'm starting to earn money again after wasting my life in University for 3 years.

Have I missed anything?

>Have I missed anything?

You said you haven't got a penny in the bank, you will need at least a 10% deposit. Does your sister have £10k?

Other than student loan do you have any other debts?

When you are a landlord, even a "live in" landlord you will have extra costs, such as insurance, etc

>within 5 years
>rent out two rooms to friends
You think your friends in their early 20s will want to live in your house for 5 years?
When they don't, will you rent the rooms out to strangers?

You are making an assumption that you will always have renters and never have property damage.
Its a sound idea but how will you deal with the first property of you only have 1 or 3 tennants? Who is responsible for damages in which room? Can you trust your sister to sit on money for repairs? Are you trustworthy of holding money for repairs? Who decides which contractor to use for repairs? If you can fix it yourself will your sister compensate you? Who decides when you want to sell the house?
You are putting the cart before the horse.
Counting your chickens before they hatch.
Other idioms.

Split deposit, will be saving these next 2 years. Living with parents rent free to save up money and then will pay about £200 a month.

No other debts just student loan.

I'll need to look into those costs then. Where should I look?

I don't expect them to live in my house for 5 years, I have many friends who can come in and out. But I also expect to rent to other people if need be.

I see what you mean. I've got too ideal of a vision my head, but with those challenges it's still not impossible right?

We could send money to our parents to keep for repairs? That way neither of us are holding it, Tennant's in the room would be responsible for damages and costs.

We'd have to agree to sell the house, if we wanted to cash out rather than keep it for the rolling income. I'd want to keep it over getting excited and cashing out as it would be more beneficial to keep.

Made me KEK.

Firstly
£400 x 4 rooms = £1600 month
£1600 x 12 months = £19200 year
£120,000 / £19200 year = 6.25 years

This does not include interest, taxes, payments for house, renovations, water bill, electricity.
With all that counted in, a more realistic time frame would be 10 years.

Sadly your "math" doesn't add up at all. Not that this is a horrible idea, just you have no idea what you're doing.

>tennants in room will be responsible
There is a reason why people require deposits. You would also need a lengthy legal battle to get the money while being required by law to make the repairs immediately.
Also google how much it costs to repair a roof. Google plumbing repairs. If you are providing a stove and fridge then you would responsible for repairs on them. These are things that get natural wear and tear and you will be responsible for the full bill unless you can prove willful negligence like throwing fireworks into the toilet.
Have you talked to your sister about what she wants? Either of you could end up not wanting a financial burden if you cant find tenants and have to make repairs. Either of you could run into financial trouble and need the money immediately for medical bills or what have uou.

Okay, how about this?

What if I/we pulled out a separate loan in another account, joint account or whatever. Didn't touch it and just had that as security and insurance for repairs. It would naturally go back to the loaner each month, and we put the money back into that account if we need to spend any on repairs.