Sell or rent out?

seven-day-weekend

Thrugelmir wrote: »

My initial thought as well. Hard financial facts not sentiment should be the basis of any decision.

No you misunderstand. I will have paid the mortgage off with money from a very unexpected inheritance. So both houses would be unencumbered.

Running_On_Empty

Capital gains tax will be payable i believe when the bungalow is eventually sold.
Give one of the properties to your son, perhaps?

mumps

SuzieSue wrote: »

Yes, very true. Some people can cope with the stress, others can't.

It's circumstances as well. I have only just retired from quite a demanding job and am my husband's carer and do lots of childcare with grandchildren. Sometimes the slightest extra thing is just too much, straw that broke the camels back and all that. So I think it is hard to give an answer for someone else, we are all different and even for ourselves what is OK at one time might not be at another.

booksurr

seven-day-weekend wrote: »

No you misunderstand. I will have paid the mortgage off with money from a very unexpected inheritance. So both houses would be unencumbered.

no you misunderstand their posts

you have already shown that you are aware that the return on money invested in property is (currently and hopefully) greater than the return obtainable on that money invested elsewhere

you state that both properties will be mortgage free therefore you have a business start up position where there will be no debts on the business

if you were genuinely professionally approaching becoming a LL does your current house represent the property you would have bought with a view solely to letting it. If not why are you not investing the money in a different property if you wish to become LL. One of the key factors in that decision is which property gives the better yield (and /or capital growth potential depending on how you weight those 2 financial factors).

Instead, your posts show that you are not approaching this professionally. You are simply lucky enough to have 2 properties plus an inheritance and no idea what to do with that ad hoc collection of assets in order to preserve and grow them to support your eventual retirement

to offer decent advice we would need to approach this like a financial adviser which of course it not allowed on public boards as that is not allowed for obvious liability reasons! Do you need an extra income ? How much? How much risk are you willing to accept? etc etc
Only then can you have a better idea of what to do. As you admit you are accidental LL with a lucky history letting to people who have not let you down. Normally on these boards we actively advise never let to friends or relatives as damage done in a house you are sentimentally attached to will destroy family relations.

If this house is the best letting potential for you then let to strangers and forget you ever lived there. If you can't do that then buy somewhere else and/or, take some debt out against the business and buy several properties and run a professional letting business. Having unencumbered property at the start of the business just shows you are risk averse and lack vision for your business, ie you are indeed accidental LL at which point the opinions of people on these boards will not help you decide what to do as there are too many unknowns for you ever to be anything that merely depending on luck

booksurr

Running_On_Empty wrote: »

Capital gains tax will be payable i believe when the bungalow is eventually sold.
Give one of the properties to your son, perhaps?

which will instantly result in triggering CGT liability if they give the bungalow since it is not and never has been their home and such a gift is treated as a disposal ("sale") for CGT purposes

if they give son the house then the parents will only be free from tax once they take occupation of the bungalow and survive for a further 7 years. Until then the house would be exposed to inheritance tax both as a gift with reservation of benefit (whilst they live there) and as a PET for the following 7 years after they move out

missbiggles1

Running_On_Empty wrote: »

Capital gains tax will be payable i believe when the bungalow is eventually sold.
Give one of the properties to your son, perhaps?

Or sell it to him with a large discount?

SuzieSue

missbiggles1 wrote: »

Or sell it to him with a large discount?

It won't make a difference as if the person you sell to is connected to you (there is a definition on the HMRC website of what a connected person is) then the sale is considered to be made at market value so CGT will be payable.

booksurr

missbiggles1 wrote: »

Or sell it to him with a large discount?

if selling the house the discount will be a PET for 7 years after they move out

if selling the bungalow then as susiesue says the discount will be ignored for CGT purposes

seven-day-weekend

booksurr wrote: »

no you misunderstand their posts

you have already shown that you are aware that the return on money invested in property is (currently and hopefully) greater than the return obtainable on that money invested elsewhere

you state that both properties will be mortgage free therefore you have a business start up position where there will be no debts on the business

if you were genuinely professionally approaching becoming a LL does your current house represent the property you would have bought with a view solely to letting it. If not why are you not investing the money in a different property if you wish to become LL. One of the key factors in that decision is which property gives the better yield (and /or capital growth potential depending on how you weight those 2 financial factors).

Instead, your posts show that you are not approaching this professionally. You are simply lucky enough to have 2 properties plus an inheritance and no idea what to do with that ad hoc collection of assets in order to preserve and grow them to support your eventual retirement

to offer decent advice we would need to approach this like a financial adviser which of course it not allowed on public boards as that is not allowed for obvious liability reasons! Do you need an extra income ? How much? How much risk are you willing to accept? etc etc
Only then can you have a better idea of what to do. As you admit you are accidental LL with a lucky history letting to people who have not let you down. Normally on these boards we actively advise never let to friends or relatives as damage done in a house you are sentimentally attached to will destroy family relations.

If this house is the best letting potential for you then let to strangers and forget you ever lived there. If you can't do that then buy somewhere else and/or, take some debt out against the business and buy several properties and run a professional letting business. Having unencumbered property at the start of the business just shows you are risk averse and lack vision for your business, ie you are indeed accidental LL at which point the opinions of people on these boards will not help you decide what to do as there are too many unknowns for you ever to be anything that merely depending on luck

Thanks, that is sensible advice. We had indeed thought of selling up and buying a different property, but then thought, it costs money to do so and we already have a property sitting there. We are inexperienced, and welcome the input.

NB as soon as I know exactly how much my inheritance is (I know that it will cover the mortgage), I am going to consult an IFA. I am using a man recommended by my good friend, her family have used him for many years.

We will be living in the bungalow, it is the house that will be vacant.

seven-day-weekend

missbiggles1 wrote: »

Or sell it to him with a large discount?

Our son has his own flat, he will just find the house a hassle. He has Asperger Syndrome and will find it stressful and baffling to have to deal with the garden and external maintenance. (We had this discussion just before he bought his flat).