How Long Can You Live in an Investment Property

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With circumstances constantly changing and life throwing curveballs, you may one day find yourself in need of some temporary accommodation.

Be it for repairs, renovations or another reason, sometimes your home will not be fit for living in. It’s in times like these when you need to consider where you can stay for a short period of time.

While some will choose to live with friends or family, if you’re fortunate enough to own an investment property, you may consider living there until you can find a new primary residence.

But is living in a flat or house intended for property investment allowed? The short answer is no, you can’t typically live in your own investment property. However, this requires some explanation, which is what this post is for.

Here, you will find answers to questions like:

  • What happens if you move into your investment property?
  • Can I live in my own investment property?
  • Can a family member live in an investment property?
  • How long after buying an investment property can you live in it?

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What Is an Investment Property?

Before we get into the nitty-gritty, it’s important to address exactly what we mean by an investment property.

An investment property is real estate that has been purchased with the intent of generating money. This means buying rental property like commercial, student or residential real estate, and renting to tenants to generate rental income.

Any kind of property can be an investment property, from flats to houses to office space.

You can use your own personal funds to purchase an investment property or use a buy-to-let mortgage. Buy-to-let mortgages are different from residential mortgages in several ways and are often not regulated by the FCA (Financial Conduct Authority).

In other words, buying an investment property means you’re a real estate investor.

Can I Live in My Own Investment Property?

In short: no, you cannot live in an investment property if you’ve purchased your property investment with a buy-to-let mortgage.

This is because living in an investment property will be in breach of your mortgage terms, which has been specifically designed for property investors to let to tenants. 

The Financial Conduct Authority differentiates normal mortgages and BTL mortgages differently, which means that mortgage lenders will specify that your investment property should only be let to tenants.

Naturally, without tenants in your home, you won’t be generating the rental income needed to cover mortgage payments. 

Without this expected rental income, you’ll likely be unable to cover the investment property loan, which will be a cause for concern for your investment property mortgage provider.

However, if you didn’t use a buy-to-let mortgage to purchase your rental property, then you’re free to live in the property for as long as you want.

This will mean you cannot earn income from tenants, however, and if there are currently tenants living in your investment property then you cannot evict them without proper reason or notice just so you can live there instead.

So while you may live in an investment property if you own it outright, the loss of income is often not worth it.

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What Happens if You Move into Your Investment Property With a Buy-to-Let Mortgage?

You may think it’s a good idea to move into your investment property as long as you don’t get caught, but there are some huge implications of living in rental properties and real estate purchased under a buy-to-let mortgage agreement. 

  • You could be put on the Rogue Landlord Database, meaning you will be blacklisted from renting out properties and renters will see you have committed a bannable offence.
  • You could be found in breach of the Fraud Act 2006 and could face jail time.
  • Your mortgage lender could require you to pay off the entire mortgage payment in full.

These are likely consequences you’ll want to avoid, so real estate investors looking to live in investment properties should consider switching their buy-to-let mortgage over to a traditional residential real estate mortgage.

To do this, you’ll need to speak to your mortgage lender and remortgage. However, this may not be possible as not all lenders will offer both buy-to-let mortgages and residential mortgages. 

Residential mortgages are regulated by the FCA, and so your lender will want to change your mortgage over to a residential one to gain access to the increased protection the FCA provides for both parties if possible.

If in doubt, seek professional advice for all things real estate investing. This can include learning more about property taxes and tax implications, mortgage insurance, interest rates, and more.

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How Long After Buying an Investment Property Can You Live in It?

As already mentioned, you can’t live in an investment property purchased with the help of a BTL mortgage. However, once the mortgage term ends and you’ve paid off outstanding debt, you can then move into the home as you already own it.

This means that you’ll need to wait for the mortgage term to end, which is usually around 25 years after buying an investment property before you can live in it.

If you bought the investment property using your own funds or with a payment plan, you can usually live in the property from when you have full ownership.

If there are tenants already living in the property, you will need to wait for their tenancy period to end before you can move in. This can be between 12-24 months, depending on the length of the tenancy and when they moved in.

You cannot evict your tenants without proper notice as this is illegal, and generally evicting tenants early can lead to disputes and complications which you would likely want to avoid.

Can a Family Member Live in an Investment Property?

Yes, rental properties can be rented to a family member. However, there are some rules and tax implications you need to be aware of, specifically surrounding mortgage rates on your buy-to-let property.

Many lenders offering mortgages will see renting to your family as a higher-risk investment, and may even refuse to allow family or friends to stay in homes purchased through a mortgage. 

This is because you may be more lenient towards your family tenant, meaning you may not chase missed rental payments, evict them if they are breaking rules, or you could allow them to save money by charging less rental income.

While this is understandable and admirable, it may mean you struggle to keep up with mortgage repayments. You may find your lender chasing you down to get the repayments, which is not a situation you want to be in.

As always, seek advice from a financial expert or speak to your lender to see their rules on renting to family.

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Learn More About Buy to Let Property With RWinvest

If you are looking to begin your journey into property investment, using the services of a property investment company may help you find the right investment for you.

Here at RWinvest, we are experts on all thing’s rental property.

With over 17 years of experience in residential and student investment properties in the UK property market, we have built up one of the best supplies of investment properties in the North West.

If you want to buy residential or student rental property with high rental income potential, then we’re the company for you.

Our industry-leading teams will guide you through every step of the property investment process, from finding the right opportunities for you to purchasing the property, to ensuring you are happy with your investment over time.

We have property investment opportunities open in real estate hotspots such as Liverpool, Manchester and Luton with high rental yields, affordable payment plans and prime locations that are some of the best investment opportunities in the UK.

Alternatively, you can learn more about buying rental property in our in-depth buy-to-let property guide.

There, you’ll find more detailed guides to:

John Brady

John Brady

John is a property writer here at RWinvest. With a close eye on property market news and updates, John writes detailed and informative articles on a range of topics that are helpful for anybody looking to invest in UK property.

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