AIBU to consider buying a student flat on the seaside to use for holidays in Aug?

[tashka]

Hi everyone

I am a single mum with a toddler, I have a decent job and saved a bit of money and I am considering the idea of buying a 2-bedroom flat somewhere on the English seaside near a university, so that I can rent it to students during the year (to cover mortgage) and then use it as a holiday flat for myself and my DD in August.

What do people think about the idea in general? So far I can only see the positives - provided I can get something within walking distance to the beach and rent it to students during the year, I can save all that money on summer holiday rent! I have been going on holidays in June and September previously, but my DD will start school nursery soon and the prices in August seem extraordinary - twice as much!

Sounds like a good idea but be sure to take a big cleaning deposit.

You'd maybe better letting it as a holiday let and going at any other time except August (as this is when you're likely to get the maximum for it) - depending on location and demand though as you might not be able to fill it all year to cover mortgage.

Interesting idea. Don’t know about English seaside but could work in somewhere like Aberystwyth.
If I had some spare funds, I’d look at buying and renting out a flat or small house as self catering for tourists. The downside is it would be most in demand during school holidays but on the plus side it could earn as much in a week as student accommodation does in a month, and if not too far away you could go after school on a Friday and return on Sunday evenings when it wasn’t booked.

Pick an area you would like to buy in and speak to the local letting agents to see if there is a demand for the shorter leases of 10/11 months. They will give you lots of information and be able to tell you the costs involved in becoming managing agents for you so you do not need to arrange boiler servicing etc.

10 month leases are really popular with students who want to go home in Summer. You would definitely get interest as it can save them a huge chunk of money. Especially in seaside towns where the appeal to stay on for summer is not always as appealing as it is in a big city!

I do have a bit of experience with this because my parents rent out student lets in Scarborough, which is a seaside town. They rent out 9/10 months a year as student flats and have upto 2 weeks off where they fix up the house from the students leaving then rent it out as a holiday let until the end of August. They then do a deep clean, and are ready for the students to move back in September.

It works really well for them. They always have their next set of tenants lined up by October, the students snap them up.

Cross post with Elmo!

why not airbnb it instead?

Do you think you'd be happy with providing lockable furniture/even give up one of the bedrooms for their possessions whilst you were using it in the summer?

We viewed a house with that sort of arrangement - everything personal had to be entirely taken down and stored within one bedroom, then restored, if we wanted to let again the following year.

I didn't mind the idea, personally. A much simpler form of unpacking.

Which seaside towns have a lot of students?

Aberystwith, Bournemouth, Essex, St Andrews, Brighton, Aberdeen, Swansea... lots! That's just off the top of my head

Parent of students here. A ten month let would be wonderful. Neither of mine have ever chosen to stay in uni town over the summer, mostly they finish in June and go back late September. I hugely resent having to pay for a place that is empty for 3 months each year but they have never been able to choose less than a 52 week let.

Chichester?
Brighton?
Southampton
.

Are you set on England, or would you consider other parts of the UK?

I guess it depends on where you live...you probably don't want a six hour drive in the August heat with a LO!

I have a client with with student properties in several places, including Swansea and Brighton which fit your brief and have a shortage of student accommodation. This probably means that you'll easily find tenants and you may even be able to be picky (specifying only final year students or postgrads, for example - although I don't know if that's possible).

My client makes decent money from student lets, it's his main source of income, but he is partially retired and has plenty of spare time.

If you are expecting them out over the holidays you'd have to provide 10 month leases (which would be irritating to most as who wants to move after 10 months and I can't imagine you'd get much interest)!

Disagree, you'd get loads of interest! As a student it was a nightmare having to pay for 2 months of rent when you were miles away at home! Sure some students stay over summer but they are by far the minority.

I don't know what you work at OP but if you claim any sort of benefit - child tax credit etc then the income for the flat will be taken into account for that, you will also have to pay tax on the income (after expenses) the law around this changed recently making BTL less advantageous. If you get a HB top up or help with mortgage interest on the home you live in you could lose that as youwould own a property (even if you are not living in it).

Students are good tenants in that they actively want to leave at the end of tenancies (usually you don't need to evict). They tend to pay the rent as their parents are guarantors and are liable for the rent of the whole place not just their child's share. However, they do tend to be hard on properties. A 2 bed flat may be trickier to let. Older students doing PHd's etc tend to have a partner and rent a one bed and undergrad's want a shared house with 3/4+ bedrooms. A 2 bed might be a bit pricey for 2 people. A lot of unis have an accomodation office and some a "lettings" side - cheaper than the usual agent and will give you good advice.

Talk to agent in the area you want to buy, some will manage for you, and advise.
Contact student accommodation officer or student union at relevant uni. Make sure you know all the rules and pitfalls first.
August is expensive because of school holidays and everywhere is mobbed and hideous. Also most lucrative to landlords! Last week of holidays cheaper in France
Consider a holiday let and have your break June, July or September until you have to have august because of school. Or a winter let, sept-June is common in holiday towns, horrid for tenants unless students. Unfortunately there are tax restrictions on doing both in same year.
It looks like easy money but is work. If you make money from a buy to let it will cover your holiday costs

I have a holiday let I let out, thinking as you that we can use it too ( as indeed we did over Christmas). It’s a massive amount of work. Something always wants doing. For example last month someone fiddled with the central heating, which meant an emergency plumber had to be called. As owner, any little thing and you get a call, and it has to be sorted there and then - and at a cost. The general wear and tear is horrendous- chairs, tables, beds. Whenever we do go there ( for a so called holiday) it’s just sheer hard work the whole time. I can get in there a lot, so keep on top of it, so any stains in the carpet get sorted - a student let might need flooring replaced on an annual basis. It’s even worse if you are managing it from a distance. Use an agency and a large chunk of income goes ( with VAT to the agent on top). Plus you need insurance, public liability insurance, WiFi etc. .
I looked at going the student route too. The legislation involved with a house in multiple occupation is mind blowing. Even for me I have to have a gas safety certificate every year, electrical items and sockets PAT tested yearly, co2 alarms are mandatory, as are remote smoke detectors, fire extinguishers , plus things like cleaning costs, replacing curtains, blinds, electrical equipment etc. It all costs far mor than you think, and makes far more work. I’m not saying don’t do it, and there is money to be made there, but there is a good reason why student let’s charge so much. Do please go and talk to some landlords and agencies first. They will tell you some hair raising stories. Good luck with whatever you decide.

Oh I have a friend that does this - seaside town in NI close to a university. She rents it out on a ten month lease and then she has it July and Aug. It took her a couple of years to get into the swing of it, get the right balance of students etc. She fell in lucky a few years ago and has tenants that she found through the Christian Union in the college, they're very neat . Every two years she gets a painter in to tidy up the walls etc but it has worked really well for her.

It sounds a good idea, but do not underestimate the amount of work having a rental property creates.

You would have to ask yourself if it was worth it all just for a couple of weeks holiday in August. As a landlady myself I have to say no, it wouldn’t.

A lot of commenters are speaking rubbish. Barely any student lets begin in July! Most are 42 weeks, mid September-mid July. And that's what most students will be looking for anyway, so they don't have to pay rent whilst spending summer hols at home. If you get a little 2 bed flat in somewhere like Brighton or Portsmouth, you could earn over £200 a week from it easy. And you'll find it gets snapped up quickly if it's in walking distance to the uni. It's a really good idea OP!

Could look at Plymouth, Exeter, Portsmouth too

Just to say that not all students live like animals. All four of my children have always had their deposits returned without a fuss and of the student flats I've seen I've only seen one disgusting one over a thirty year period. Parents tend to be a bit hotter on ensuring their children live half way decently since they've had to become guarantors.

Think carefully about tax. Mortgage interest is not deductible for tax purposes which has made a massive difference to whether btl is worthwhile.

look at eg 'park holidays'. Will sell you a caravan or lodge and handle all the admin, letting etc for a fee. BUT a caravan will decrease in value like a car, whereas a house will increase over time, so factor that in.

If your main priority is to buy a property and rent it out for long-term capital growth and / or income, then it doesn't need to be by the seaside, or a student let. Might be better to have a more open mind about location / potential tenants

On the other hand, if your main priority is to have somewhere to visit on holiday every year, then you might wish to explore (a) buying a holiday house which you can rent out for holiday lets when you're not there yourself, or else (b) signing up for home exchanges, so every year you could go somewhere different

I think you have two very different priorities, and if you try to combine them, you may end up with the worst of both worlds, rather than the best of both worlds

Do it but let on Air B&B/through an agency. Then you can keep the best weeks for yourself and rent it out the rest of the time for a premium for a week above what the students would probably pay a month.