To rent out or sell 160k property

Mizz_Pink

Hi

My Mum has inherited a bungalow in Coventry worth £160k. My Dad wants to rent it out, maybe can get £500 a month for rent, however Mum wants to sell.

They have spent about 10k on updating the property, it now has 2 bedrooms and a dorma bedroom. The garden is huge, bigger than I have ever seen !!

They are in their late 50's and I dont think they should have the responsibility of being landlords.

What do you think ?

Ta in advance

X

RHemmings

Mizz_Pink wrote:

Hi

My Mum has inherited a bungalow in Coventry worth £160k. My Dad wants to rent it out, maybe can get £500 a month for rent, however Mum wants to sell.

They have spent about 10k on updating the property, it now has 2 bedrooms and a dorma bedroom. The garden is huge, bigger than I have ever seen !!

They are in their late 50's and I dont think they should have the responsibility of being landlords.

What do you think ?

Ta in advance

X

That's 3.75% gross yield. Before tax. Before buildings insurance. Before maintenance. Before expenses. Before voids. Before you own labour, or paying some agents to look after it. You can easily get that gross yield putting the money into a bank account.

The question comes down to whether you think the value of the property is going to go up enough to out-perform putting the money in the bank. From a financial point of view. In terms of stress and strain and responsibility of being a landlord, the money in the bank would probably cause much worry than a house.

Must say I like the idea of the massive garden.

ravenfield

I think it's very good time to sell it since the house prices is at it's perk! Some discussions are going on about how bad is BTL nowadays anyway

Mizz_Pink

Thanks

I dont know the measurements of the garden but it took 500 rolls of truf to cover it and you can have a really good game of rounders on it !!!

RHemmings

Mizz_Pink wrote:

Thanks

I dont know the measurements of the garden but it took 500 rolls of truf to cover it and you can have a really good game of rounders on it !!!

Turf! I feel that I must thank you for not putting concrete down on it. Happens too often these days.

ioscorpio

Have you thought about getting planning permission depending on access to build another property in the large garden.

RHemmings

iomexico wrote:

Have you thought about getting planning permission depending on access to build another property in the large garden.

There goes the green space :mad:

Mizz_Pink

iomexico wrote:

Have you thought about getting planning permission depending on access to build another property in the large garden.

There would be no access to it as the garden backs on to other gardens.

They are already having problems regarding building regs required of the stairs they put in! its a nightmare.

Debt_Free_Chick

Mizz_Pink wrote:

They are already having problems regarding building regs required of the stairs they put in! its a nightmare.

Then they should think about they would feel with having to cope with all the maintenance of owning another property. Tenants are, understandably, less tolerant than owners. Many things that you would leave undone in your own home must be attended to if you are a landlord - the tenants expect it and they're paying for it.

If they sold the house, got £160k for it and put it in the building society, they'd get more than £500 a month interest. They'd have to pay tax - but then they'd be paying tax on the rental income, less a deduction for expenses. With no mortgage on the property, their expenses would be minimal.

It might be worth asking some local estate agents what the market is like in that area - for lettings and sales.

Mizz_Pink

It has already been on the market before the work was done to improve it. Houses sell quite well in the area, the crescent is only bungalows so its good for retired people. I cant see retired people wanting to rent.

Jay1b

Firstly a £130K house usually rents for about £600, so i'm sure that you would get about £700 for that house. Did the £500 come from a guess or a rental agent? I would get a second opinion for the about of rent you would receive.

Having the money in the back would be less worry, but i think your parents would be better off renting it out. The best thing i would advise is to cough up £25 and have a 30 mins chat with a financial advisor based around your area. Or at least speak to a number of rental agents (obviously these will be biased). You need to look at pure profits, after tax and expenses for each, then judge how YOU think thing housing market will go.