I'm thinking of buying a buy to let house - am I stupid?

[VivaLeBeaver]

Well, when i need to covince dh first, so help me think of pros and cons.

The house in question belongs to my dad but he's selling as he's got married. So I know the house and know its in a good state of repair. It's a three bed terrace in an area where there's quite a few students for the local teacher training college. I'd say the vvalue of the house is about 120k looking at similar stuff on rightmove, but that's asking prices not what stuff is going for. I don't want to rip my dad off but equally I don't want to pay a full asking price just because he's my dad!

Anyway, house could be rented out to 4 people as its common for the living room to become a bedroom in rental properties of the layout this house is. I've looked at rental prices and they seem to be between £70 and £90 per person, per week for a 48 week rental period. We can sign up to a thing with the college where they'd promote the property to new students. The house next door is always rented out to students from this college.

So say we could get £1200 a month rent. We'd have to pay water rates but not council tax I don't think if they're students?

Main thing will be the mortgage. Looks like we'd have to put down at least a 25% deposit. Dh has that sort of cash but I think that would be most of our savings gone. He's quite cautious so not sure he's going to go for this. He will worry about if we don't rent it then still having to pay the mortgage. Dh is very, very good at DIY so can do repairs though obviously gas, elec would need to be done properly.

Dh doesn't have a pension and is 50yo, I'm hoping that we'd make a bit of money each month from it now and in 20 years time have the mortgage paid off and it all be profit. I'm mid 30s so younger than dh so should be able to get a 20 year mortgage.

Am I bonkers. Any advice from people who have done this?

Is your mortgage a repayment mortgage?
We were advised when looking into BTL, to take an interest only mortgage and then over pay.
This ensures that if you have a crap month - repairs etc then you had spare cash due to a smaller mortgage. So it won't cripple you.

It is a repayment one but i think id rather stay on a repayment. banks are stopping interest only mortgages now. nationwide dont do them anymore.

I was a bit about an interest only one TBH. Because I guess there would always be a temptation to use the money elsewhere.

Its getting more and more expensive to be a student and harder and harder for universities and colleges to stay solvent. Where are the students who will be renting studying ? Will it definitely be there in 5 years time ? Will students of the future be able to afford to pay rent and study ? If not is there a market for your house to be rented to a family and would the rent yield from that pay your motagage ?

this page tells you about HMO 's. It may be worth reading if you are going down the student route. I believe that if you can let to a group of students rather than individual students you may not have to declare your property as a HMO (not sure though, maybe someone on here has more info).

Some councils do not allow neighboring properties to register as HMOs, as it changes the character of the neighbourhiid etc etc.