New Twist to Student Housing
March 7th, 2008 by Ruby3881I was recently asked to look into housing options for a family member who is planning to come to Montreal for university. There’s a housing crisis going on here, especially in the rental market. Other than paying an outrageous rent to live in residence, I wasn’t sure an out-of-town student would have a whole lot of choices - at least for that first semester while she settles in, meets classmates, and maybe finds someone looking for a roommate.
In my search I learned something new: students in the UK are soon going to have an exciting new option when it comes to housing: a buy-to-rent student mortgage that will allow them to purchase property instead of paying rent to someone else! So a student can take the money that would have gone on rent or overpriced dorm & meal ticket fees, invest in a property and even generate income by taking on roommates.
Students? Owning property? OK, it sounds a bit far-fetched. But a lot of students are already renting large apartments and managing the business of getting the rent and utilities paid each month. Many students live in a 3, 4 or 5 bedroom rental unit. Some are even lucky enough to find a house to rent near their campus. If they can look after the financial gymnastics of paying as a group, what’s to stop one student from buying a property and becoming the landlord?
Obviously, a young person who is still in school is not going to walk into any bank and get a mortgage. And an investment of this kind will likely be a cooperative effort on the part of the student and his parents. Most likely Mom & Dad will be putting up the money for the initial investment, and my guess is that they’d be co-signing on the mortgage too. So this is a good option for a student who has parents not too far away, who are willing to be involved when their help is needed.
Buying a property opens up a lot of possibilities that didn’t previously exist, especially in an area where safe, clean rental housing is at a premium. And renting part of the property out means that the student owner can basically live rent-free while at school, plus she leaves school with an asset that ensures she won’t suffer too much in the early days of pounding the pavement for a job. At the very least, she is a property owner.
Doesn’t look too bad on a resume, either, come to think of it. A prospective employee who has worked his way through school is always preferred over one who has never worked at all; even volunteer experience shows an employer that the candidate can handle the responsibilities associated with the job. Mortgages are a pretty big responsibility, as is the job of administering and maintaining a rental property.
I’d want to know more about the details of how the student mortgage works, and certainly it would be important to choose tenants who would take good care of the property and pay their utility bills. But just on first blush, this sounds like a very workable solution to the problem of finding safe housing for a university student.
This work was created by Ruby of Freehold 2, and is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 2.5 Canada License.
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