Advice needed on letting a house

Mik77

Hi, please advise me here.

I'm in the unfortunate position of dealing with my fathers property after he passed away. His Will splits the proceeds from his house between three of us, (myself and two sisters), we'd initially thought about selling the property however due to the state of the housing market renting the property out for a while may be a better option.

The average return per calender month would be £450 (after the letting agent takes their cut), thats £150 each.

I'm basically wondering how receiving £150 each would affect our current status, ie in terms of tax etc.

I earn 28k.

Sister earns 20k

Other sister is unemployed single parent on benefits.

Obviously any financial benefits received would need to be declared, and I assume £150 would mean an increase of tax for two of us, and potential decrease in benefits for the other.

Can this somehow be offset against paying for improvements to the property.

Our intention to rent the property out is not for imeadiate profit, it's to wait until the market picks up.

I hope I made sense and would appreciate any advise.

Thanks.

AverageJoe_4

Renting is a business like any other and so its going to be expenses off set against income to give you a profit which (if any) you would be accountable for in several ways depending upon your circumstances.

The best thing to do is get a great accountant to make your extra income as efficient and worthwhile for you and your sisters.

PS, sorry to hear about your father.

good luck.

m_13

I'd take a look at the information on www.landlordzone.co.uk. Their forums are friendly and helpful.

I'm sorry to hear about your father but having worked in probate for a short while, I saw families fall out over inherited property all the time. Are you certain your sisters, particularly your unemployed sister who is on benefits and may lose them through the rental income, is happy to rent the house out?

AverageJoe_4

m_13 wrote: »

I'd take a look at the information on www.landlordzone.co.uk. Their forums are friendly and helpful.

I'm sorry to hear about your father but having worked in probate for a short while, I saw families fall out over inherited property all the time. Are you certain your sisters, particularly your unemployed sister who is on benefits and may lose them through the rental income, is happy to rent the house out?

Not if they use imaginative accounting.!! It can be put through under one name and if the OP wants to share it out, then he kindly shares it out to his sisters.. Its always nice to be given a gift from your brother when your on income support.

poppysarah

The state of the housing market is such that properties at the right price are selling. Do you 3 want to be financially responsible as landlords?
If the house needs work who will pay for it? Who will manage the property? Who will organise repairs? You need to be very clear about everything first. Plus read up on your responsibilities.

AverageJoe_4

The state of the housing market is such that properties at the right price are selling.

Forgive me for saying so, but any house in any market state will sell at the "right price". That's the point. It will only ever sell for what someone is prepared to pay for it.

poppysarah

Oh yes... it's just when people want to hold on property in the hope the market will get better shortly or they think renting is easy. And a mistaken belief that they have a right to an excessively high sale price just because the housing market had gone mad (It's took out the economy you know!)
it's not like properties aren't selling (if I believe one local EA every house they touch is selling within minutes of coming online)
I also feel very frustrated that people think renting a property out will be easy - when it been a family members home it can be heartbreaking to see it lived in by someone who doesn't treat it with the love and care the family think it should be.

Robert_Sterling_3

Mik77 wrote: »

Our intention to rent the property out is not for imeadiate profit, it's to wait until the market picks up.

You may wait a very long time before the market picks up.
Who will Land Registry have down as the owners?

Robert_Sterling_3

The housing market is made up of three types.

Owners who cannot accept that their asking price is too high.

Buyers who think that every seller of every house will should be willing to accept an unacceptable offer.

Others who bite the bullet.

AverageJoe_4

Robert_Sterling wrote: »

The housing market is made up of three types.

Owners who cannot accept that their asking price is too high.

Buyers who think that every seller of every house will should be willing to accept an unacceptable offer.

Others who bite the bullet.

I have a house for each one of those occasions on the market now - which one will sell first!!!!

Mik77

Thanks everyone, i've been aware of the additional hassle which could occur from keeping his house on, and also the heartache of poor tenants.

The letting agents which I had spoke to says that they look after the necessary stuff, collecting rent, etc, (for a price).

To be honest renting it out is second choice, as we've had enough to deal with recently, I'm going to do more homework, speaking to more letting agents/chat with a financial advisor to weigh up our options.

we're also going to get the house valued regardless as we might be surprised that the valuation is close to what we expect. (I know a valuation doesn't guarentee a buyer but its a handy guide).