5 students buying a house......can it work?

[Dave7]

I know of a young university student who has decided, along with 4 others, to buy a house. They have already put deposits down.
To me it seems very 'iffy' and I immediately see problems (that hopefully wont happen).
Now I have no idea of the size or how many bedrooms etc but.........
What if there is a fallout ?
What happens when, say in 3 years, one of them wants out ?
etc etc.
Has anyone had similar experience or know of anyone that has done it ?

 

[twentysix by twentyfive]

Needs a very carefully written contract. Still risky and likely to end in tears tho'.

 

[Dave7]

A half decent lawyer will be able to advise them on purchasing as 'tenants in common'. If any bank mortgage is involved, the bank will want this laid out clearly.

But how can one opt out, 3 years down the line? He would struggle to sell his "share" for several reasons.....so it could be 3 years "dead money".

 

[pplpilot]

Good grief no...

 

[Markymark]

Once in every lifetime,
Comes a love like this,
Oh I need you, you need me,
Oh my darling can't you see.
Young Ones.
Darling we're The Young Ones.
The Young Ones.
Shouldn't be afraid.
To live, love, there's a song to be sung.
Cause we may not
Be The Young Ones
very long

 

[uphillstruggler]

pretty sensible if you ask me, its gotta be better than throwing the money away on rent

 

[screenman]

pretty sensible if you ask me, its gotta be better than throwing the money away on rent

As long as the house increases in value, it could be a cheap way of living.

 

[uphillstruggler]

As long as the house increases in value, it could be a cheap way of living.

but even if it stays the same, they don't lose money (apart from fees etc). I think that's the way to look at it - hopefully a way of 'saving money'

I looked into this sort of thing when I was young with mates and I know other people who did and set themselves up for later with a deposit made purely from the value of the house rising.

I do agree that there may be a drop in value and people fall out but with the correct contract in place, I doubt they stant to lose as much money as 3 years x 5 people x rent

best of luck to them I say

 

[Beebo]

pretty sensible if you ask me, its gotta be better than throwing the money away on rent

Consider the stamp duty, legal fees, survey etc. And the savings over a 3 year student uni course doesn’t look great.
Plus the additional hassle that this arrangement will no doubt bring. I would far rather rent at uni and buy once I had set down a few more roots.

 

[uphillstruggler]

Consider the stamp duty, legal fees, survey etc. And the savings over a 3 year student uni course doesn’t look great.
Plus the additional hassle that this arrangement will no doubt bring. I would far rather rent at uni and buy once I had set down a few more roots.

I think my post above yours landed nanoseconds before but I agree to most of it.

 

[mjr]

Consider the stamp duty, legal fees, survey etc. And the savings over a 3 year student uni course doesn’t look great.
Plus the additional hassle that this arrangement will no doubt bring. I would far rather rent at uni and buy once I had set down a few more roots.

If it's actually them buying it. If it's a shared corporation buying it, then they could sell on their rooms and make it the start of a new student housing co-op, which could also deal with all the likely complications of different course lengths (due to placement years, illness deferment or whatever), some doing postgrad or working in the same city and so on.

One of my the students I started renting with quit their course, got a good job and bought the house next door before the end of our rental. He might still own it and be renting it out - I'm not sure. It was a fairly cheap city back then, so the richer students buying ex-council or small recently-built houses wasn't that unusual.

 

[nickyboy]

It's a nightmare waiting to happen

1) Contribution to upkeep of the property, particularly if one person causes some damage
2) One purchaser quits study and wants their share of the capital back - can't sell a 1/5 share easily
3) One purchaser fails to keep up with mortgage payments

If one of my kids came up with this crackpot plan I'd tell him to forget it.

 

[Pro Tour Punditry]

You all worry too much about stuff

 

[MontyVeda]

The cost of a room in a student house starts at around £80 per week* up here. Assuming £100 is the average, over three years they'd each spend around £15,000 on rent... not sure what they'd pay on a mortgage for a five bedroom house, but they'd be looking at at least £200,000 for one outright.

*usually including bills, rates and broadband.

 

[Brains]

It can be done.
I did it back in 1980
I now own >1 property

BUT.

You need to go in eyes wide open.
You need guarantors (Bank of Mum & Dad) for all costs and expenses
Buyers need to budget for replacement of fixtures and fittings (say £2k PA), so the monthly payment must be higher than the mortgage.
Buyers need to realise that if they leave, then the house boss will find the new replacement (afterall they have to live with them) but the owners remain ultimatly responsible for the payments.
There needs to be an agreed exit strategy from the outset. Such as an agreed option to sell on given dates (say every 3-5 years)
If after say 5 years only one person wants to sell then they MUST have the option. The others can buy their option, or everyone sells.
The only way this will work is Socalist Benign Dictatorship.
One resident has to be the boss and sort out the money, the rota's, and makes the decision on the coulor (and cost) of the living room carpet etc.
All must be agreed, on paper, before you kick off.


In my case it was a 25% split.
One person never moved in, so in effect became a silent partner and was happy with that (as house prices were shooting up)
One person moved in a year late.
One person moved out after 3 years.
This meant that we always had owner and non-owner occupants, we charged everyone the same, and everyone had a hand in the same decisions
I sorted out all the money.
Even after I moved out (and left 1 owner and 3 tennants behind) I was still the one to make all the decisions and sorted the money and in effect became an Absentee Landlord, which was a situation that suited everyone.
We then rented the house out for a number of years after which I then bought out each of the partners, (which then started me on the path of buying other properties, but that is a different story .......)