how does owning a property effect your student finance

Im currently an undergraduate looking to buy a small property. i would basically buy a property and rent it out so the mortgage would pay itself .Now i have heard that getting rental income from property could affect your student finance but if im not getting any of the money for myself is that still true. i really want to know if this is because im looking to do a postgraduate in medicine and probably would'nt be able to pay for my degree alone and don't know yet if i could get a job whilst doing my degree
would really appreciate some advice x

Reply 1

martin7

20

Original post by Dena567

Im currently an undergraduate looking to buy a small property. i would basically buy a property and rent it out so the mortgage would pay itself .Now i have heard that getting rental income from property could affect your student finance but if im not getting any of the money for myself is that still true. i really want to know if this is because im looking to do a postgraduate in medicine and probably would'nt be able to pay for my degree alone and don't know yet if i could get a job whilst doing my degree
would really appreciate some advice x

I can't answer your question about whether this would affect your student finance -- I don't know the answer to that.

But there's a lot of responsibility in owning and letting a property.

You'll need to get a buy-to-let mortgage, which is likely to have a higher interest rate than an owner-occupier mortgage. You'll need to ensure that the rent you receive is enough to cover the mortgage cost. You need to take into account any time between tenants, when you'll be getting no rental income but still need to pay the mortgage. You'll need to be able to fund any repairs that become necessary. If your letting income together with any other income (like a job) exceeds the income tax threshold, then you'll be paying tax on top.

Reply 2

greg tony

16

Original post by Dena567

Im currently an undergraduate looking to buy a small property. i would basically buy a property and rent it out so the mortgage would pay itself .Now i have heard that getting rental income from property could affect your student finance but if im not getting any of the money for myself is that still true. i really want to know if this is because im looking to do a postgraduate in medicine and probably would'nt be able to pay for my degree alone and don't know yet if i could get a job whilst doing my degree
would really appreciate some advice x

Id say the chance of you getting a mortgage and a buy to let one at that while a fulltime student is close to zero. Remember you need to prove you can pay mortgage first, you cant just say a tenant will. Mortgages are done on a simple multiplication of your earnings, so unless you are taking home a significant salary, have a massive deposit (that reduces LTV rate to what you can afford), or are buying a very, very cheap property then id be surprised if this was a goer.

Greg

Reply 3

normaw

Clearing and Applications Advisor, Universities Forum Helper

19

Original post by Dena567

Im currently an undergraduate looking to buy a small property. i would basically buy a property and rent it out so the mortgage would pay itself .Now i have heard that getting rental income from property could affect your student finance but if im not getting any of the money for myself is that still true. i really want to know if this is because im looking to do a postgraduate in medicine and probably would'nt be able to pay for my degree alone and don't know yet if i could get a job whilst doing my degree
would really appreciate some advice x

It could affect your student finance as it is classed as unearned income and you have to declare it (even if it is paying off your mortgage). The following is quoted from section 4.3 on this page:

You should include details of any taxable unearned income you receive from the following sources:

bank or building society gross interest

property, lettings or rent

dividends or investments

trusts or sponsorships

any other payment received for attending the course

Reply 4

TolsondMan

2

I totally understand the frustration with the mortgage interest situation. It's indeed a headache, especially for landlords who rely on these tax reliefs to manage their finances better. The partial relief we're getting now is a far cry from what it used to be, and it's definitely straining the budget.
[start]You're right about the Student Loan Company not being up to speed with these changes. It's a widespread issue that affects many of us in the property business. I agree that raising this issue with our MPs could be a strategic move. Collective action has a higher chance of bringing about change.[/start]
[start]Additionally, it might be worthwhile to consult a property lawyer to understand all our options and rights in this scenario. I had a similar issue and reached out to Conveyancing lawyers Brisbane as I did. They provided me with comprehensive advice on how to navigate these financial changes and even offered strategies to mitigate the impact on my investments. Sometimes, getting professional advice can open up avenues we hadn't considered.[/start]

(edited 5 months ago)

Reply 5

Kutie Karen

19

Original post by TolsondMan

Owning a property and earning rental income can indeed affect your student finance, especially if you're considering a postgraduate degree in medicine. Even if the rental income is just covering the mortgage and you're not personally profiting from it, it's still considered income by Student Finance.
[start]Here's the thing: when assessing your financial situation, Student Finance looks at your gross income, which includes rental income before expenses like mortgage payments. So, this income could potentially reduce the amount of financial support you're eligible for.[/start]

Yes that is true. The tax man will also want a share of your rental income too.

how does owning a property effect your student finance

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