sheltered accomodation - funding

dorothy52

Hi all - we are looking at sheltered accomodation for our Mum - she owns house outright and we are thinking of renting it out to help pay the fees thus safeguarding our ineritance - with her blessing of course - what do you think - anyone done this? Pros and cons?

margaretclare

dorothy52 wrote: »

Hi all - we are looking at sheltered accommodation for our Mum - she owns house outright and we are thinking of renting it out to help pay the fees thus safeguarding our inheritance - with her blessing of course - what do you think - anyone done this? Pros and cons?

All the people I've heard of round about where I live who've done this kind of thing i.e. moved into sheltered accommodation when they owned their own property, have sold up and moved - simple. They're either paying rent, which means they still have a sizeable load of dosh from the sale which is in the bank, or they've bought something smaller - a retirement flat or similar.

Renting out a house means being responsible for collecting tents, doing repairs, being responsible for upkeep and anything going wrong. Also for tenants not paying rent, disappearing having not paid rent/caused damage.

The words 'safeguarding our inheritance' on these boards do NOT win you friends or attract sympathy.

dorothy52

Thanks for quick reply - not looking for sympathy or help from govt - and I know I am risking a roasting from some on here for saying that, and I certainly wouldn't look at deprivation of capital, but Mum is heartbroken thinking that she can't pass on her house to kids or grand kids

margaretclare

dorothy52 wrote: »

Thanks for quick reply - not looking for sympathy or help from govt - and I know I am risking a roasting from some on here for saying that, and I certainly wouldn't look at deprivation of capital, but Mum is heartbroken thinking that she can't pass on her house to kids or grand kids

Not much use being heartbroken. There are serious issues here and serious decisions she'll have to make. For instance, does it have to be 'that house'? Do her kids/grandkids actually want it as it is now, or would they be happier with money instead, to help them on to the housing ladder? I know people - as I indicated above - who've sold up and now happily rent some sheltered accommodation for themselves. That has meant, they have money from house sale which they don't need now but which can be invested to form an inheritance if that is what they choose.

Why is Mum so sure that kids/grandkids actually want that house and are prepared to go through the hassle and stress of becoming landlords? Do kids/grandkids live close enough to do all that? Many of us nowadays have descendants living a long way away and they wouldn't want our house as it is.

meer53

My MIL has lived in sheltered accomodation for about 19 years. She sold her house, used the proceeds to pay rent (it's currently £96 per week) and when the money got down to about £8000 she applied for housing benefit which has been paid ever since. 2 weeks ago, she was moved into a nursing home as she fell, and is now unable to look after herself (she also now has mild dementia which is obviously not going to improve)
You don't say how old your mum is, you need to consider what will happen if she has to go into care, her house may have to be sold to pay for this, so your "inheritance" may be taken away from you anyway.

Mojisola

dorothy52 wrote: »

Hi all - we are looking at sheltered accomodation for our Mum - she owns house outright and we are thinking of renting it out to help pay the fees thus safeguarding our ineritance - with her blessing of course - what do you think - anyone done this? Pros and cons?

It can be a good way to deal with a parent's reluctance to sell up their family home.

To make it easy for Mum, make sure a couple of you have power of attorney for her so that you can deal with all the problems of being a landlord for her.

Add up what income she has coming in - pension and state benefits - and see if the rent would be enough to cover her needs. Do lots of reading on https://www.landlordzone.co.uk/ so you don't start out with too optimistic an idea of rental income and understand the problems that may (but not necessarily) come your way - tenants not paying rent, the house getting trashed, long periods without a tenant, etc.

Is the house fit for rental now or does it need money spent on it to update it?

You may find that after a period away from the house, she will feel differently about selling it so that will always be an option for the future. If she does decide to sell, there is the option of buying a long term care annuity. They are very expensive but are worth looking at.

Savvy_Sue

I'd add to the words of caution about becoming a landlord: it is definitely not something for the fainthearted these days, there is SO much legislation to comply with, and the situation can change before you know it.

I'm not saying it's a full-time job, but there are times when you do just have to drop everything to sort a problem out, or have a reliable tradesman to do so. Whereas at home you might be prepared to live with a maintenance problem, your tenants don't expect to have to do so.

You do also have to have a rentable house, in a rentable area.

However I'd echo all that Mojisola said too.

ericonabike

If the intention is for your mother to receive any form of assistance from local or central government, then the fact that the house in which she used to live was being rented out would be immaterial. It would still be regarded as capital, and thus likely to preclude any assistance. On the other hand, if she is simply looking to go from being an owner-occupier to renting privately, albeit a particular type of accommodation, then she would be free to do what she wanted with her house. Unless and until she ever needed to claim state help, in which case the capital issue would resurface.

Agapanthus

Savvy_Sue wrote: »

I'd add to the words of caution about becoming a landlord: it is definitely not something for the fainthearted these days, there is SO much legislation to comply with, and the situation can change before you know it.

I'm not saying it's a full-time job, but there are times when you do just have to drop everything to sort a problem out, or have a reliable tradesman to do so. Whereas at home you might be prepared to live with a maintenance problem, your tenants don't expect to have to do so.

Renting out a house is no great hassle if you appoint a good professional agent and let them deal with it. However, that does cost. You'd need to do your sums carefully. If the rent you can get, less the costs, less income tax, plus your mother's other income, will cover the expenses of sheltered housing/care homes for the foreseeable future with some headroom to spare then it may be worth considering. However, if at any time the money runs out and state help becomes necessary then the house would have to be sold anyway.

Yogibear

meer53 wrote: »

My MIL has lived in sheltered accomodation for about 19 years. She sold her house, used the proceeds to pay rent (it's currently £96 per week) and when the money got down to about £8000 she applied for housing benefit which has been paid ever since. 2 weeks ago, she was moved into a nursing home as she fell, and is now unable to look after herself (she also now has mild dementia which is obviously not going to improve)
You don't say how old your mum is, you need to consider what will happen if she has to go into care, her house may have to be sold to pay for this, so your "inheritance" may be taken away from you anyway.

I`m glad she pays that we live in a sheltered housing complex in Scotland we pay £481:eek: monthly including service charge and just under £35 monthly for a care package which we dont want but are forced to pay it we get no help as our savings are over £16000 and only 2 oaps pensions totalling £270 weekly