Renting out my MIL's property

Miss_Merlot

Hi all,

Long time no post!

Situation currently is this:

My MIL, 78, sadly has early to mid-stage dementia, and my husband (only child) and I act as her main carers and also hold Enduring Power of Attorney for her.

Last month we successfully moved her from her existing property (owned outright) to an Assisted Living complex nearer to us where she is coping pretty well - it will hopefully serve as a "halfway house" until it's care home time (would need a crystal ball to know when that might be - at the moment she has an absolutely abysmal short term memory, but can still just about manage her life with a little [STRIKE]lot of[/STRIKE] support from us and daily carer visits).

She owns her old house outright, though half of the property was left in trust to my OH when his father died ten years ago.

Her rent at the Assisted Living place is £950 pm and she draws £2k pm in pension after tax.

We are now looking to rent out her old house, having spent about £4k (of her money) in very much needed refurbishments (house was in quite a bad way) - something we can (hopefully) demonstrate to have been in her best interests (as per POA) in order to ready the house for generating future rental income.

According to Zoopla, she's looking at £1,300 pm rental income a month, so even with rental fees and tax taken off, will hopefully have a little extra coming in each month (not that she needs it - she spends very little beyond her rent apart from a £300 carer bill).

We have chosen an estate agency who will do full managed service for 12.5% each month (OH will try to bargain that down though!) and "hand hold" us through the entire pre- and post-let process, and sort things like boiler checks, tenant vetting etc. OH and I will be "acting landlords" (MIL could not cope with any of this - all the income will go to her though), but neither of us have done anything like this before, and time-wise have our own hands pretty full what with both of us working and looking after MIL.

We are renting out the property rather than selling it, as OH doesn't want to liquidate her assets now, should she ever need to go into full residential care in the future. He believes that if the property's all tied up in trusts and tenancies, there is less of a chance of the Local Authority getting their hands on it once her own savings (£13k) run out - though I have pointed out that deferred payment could in the future apply.

Am not sure why I'm posting other than to ask really if there is anything right or wrong we should be doing here, given there are quite a few factors in play here (MIL's dementia, Assisted Living outgoings, trusts, future possibility of care home etc).

I want to do right by my MIL, and would hate for there to be any nasty surprises down the line!

Thanks in advance for any advice here!

MM x

LEJC

You look to me like you are going in the right direction...although dont forget that rental income my become taxable if the amount received is over the personal threshold your MIL can receive so self assessment may be necessary.

In relation to the managed fee....certainly haggle it down...something closer to 9-10% should be quite achievable....and even lower if you dare...

Take it all slowly...what you are planning looks to be a good long term strategy but these things can and often change especially where dementia is concerned,having been in similar position a few years ago.
I wish you well

Pixie5740

In your shoes I wouldn't bother with a letting agent. Letting agents require absolutely no training or qualifications and often the letting agents goals are not aligned with the landlord's goals. For example, some letting agents insist on charging both tenants and landlords renewal fees for setting up new fixed term tenancies when it wasn't necessary to do so. So a letting agent could just add another layer of stress and confusion at a time when you have enough on your plate trying to make your MIL confortable.

See G_M's really useful guide for New Landlords.

It might also be worth joining a landlord association so you can learn from other people's mistakes. By all means use a letting agent to find a tenant if you think that would be easier but you should rethink using a fully managed service.

Miss_Merlot

Hi Pixie,

We were thinking to go with an agency of full service for the first year, and then when we know the ropes a bit, downgrade our service level to part managed...?

I am anxious to do things "by the book", given it's MIL's house not ours, and have a bit of a safety net there....

I think we are looking at lots of stress one way or the other!

It's been nightmare enough already moving her / coordinating change of address / sorting repairs etc as it is, on top of all the "usual" dementia stuff - so more of the same really!

MM x

Pixie5740 wrote: »

In your shoes I wouldn't bother with a letting agent. Letting agents require absolutely no training or qualifications and often the letting agents goals are not aligned with the landlord's goals. For example, some letting agents insist on charging both tenants and landlords renewal fees for setting up new fixed term tenancies when it wasn't necessary to do so. So a letting agent could just add another layer of stress and confusion at a time when you have enough on your plate trying to make your MIL confortable.

See G_M's really useful guide for New Landlords.

It might also be worth joining a landlord association so you can learn from other people's mistakes. By all means use a letting agent to find a tenant if you think that would be easier but you should rethink using a fully managed service.

LEJC

I do in essence agree with pixie about going it alone...but having been in almost exactly the same scenario the responsibility of a more hands on approach is difficult to fit in with all the other things that go on in real life!

I would personally stick with the managed for the first year and see how it goes...we did it that way and then branched out alone after that..albeit on a tenant only find type of contract.
I understand it makes better financial sense to go it alone but sometimes if you dont have the network of trades around you it can be a difficult to get someone to go out and quote on a repair,or manage certifications.
its quite a learning curve that you will be going on as well as spending time with your MIL...

edited to add...I think we cross posted as I typed the reservations miss merlot...you were also expressing them!!!

lessonlearned

Sounds like you've covered all the bases and are doing everything right.

If you have the right care package in place your mil should be able to stay in her assisted living complex for Some time yet., however as you say as the dementia takes hold then a nursing home will probably be the next option.

At that point you will become liable for her fees (well she will) but as you say they will most likely offer you a deferred payment facility, with the fees coming out of MILs share of the property.

Just as an aside have you checked that she is receiving all the benefits she is entitled to. I'm thinking of attendance allowance. This is a none means tested benefit, irrespective of income, based on need. . Given that she needs help from paid carers I would suggest that she is eligible.

elantan

Hi sorry to intrude but I saw your post and you sound like where I may find our family in the short to medium term and was just about to post asking advice ...

My Mil is starting to show more signs of dementia, she is not too bad yet but I feel its getting to the time we need to have the POA talk, I am unsure how to broach the subject, How do I say to her Mil maybe just now whilst you are good we should talk about the future, she is currently in denial that anything is wrong, she will happily say " oh my memory is terrible, I am getting worse" but when we have said to her things like " hey you've said that you feel your memory is getting worse, how about maybe talking to the Dr?" she always says no. no,

I dont want us to get to the stage where she gets really bad and will not be able to agree to a POA, we will always do our best for her and want to protect her, but I cant quite figure out how to broach the subject without upsetting her, sorry to be a pest but can I ask how you faced it ?

You seem to have everything organised and I know it is ahead of me, so would really appreciate some advice ....

Thanks

Miss_Merlot

Yes, we have AA etc all in place.

Am also on the Alzheimers forum and they've been great about pointing me in the right direction there!

lessonlearned wrote: »

Sounds like you've covered all the bases and are doing everything right.

If you have the right care package in place your mil should be able to stay in her assisted living complex for Some time yet., however as you say as the dementia takes hold then a nursing home will probably be the next option.

At that point you will become liable for her fees (well she will) but as you say they will most likely offer you a deferred payment facility, with the fees coming out of MILs share of the property.

Just as an aside have you checked that she is receiving all the benefits she is entitled to. I'm thinking of attendance allowance. This is a none means tested benefit, irrespective of income, based on need. . Given that she needs help from paid carers I would suggest that she is eligible.

Miss_Merlot

Hi Elantan,

Sorry to hear you're in the same position - dementia is a really tough road...

It's a tricky one, and after five years of dealing with dementia, we too are just muddling through best we can!

Have you found the Alzheimers Society forum?

http://forum.alzheimers.org.uk/

They've been invaluable to me over the years about things like this, and learning how to deal with dementia etc. Or just having a rant!

In our case, OH had an Enduring Power of Attorney (EPA) already in place from when MIL and FIL put their affairs in order over ten years ago, so it was a straightforward case of us just contacting the solicitor to "activate" it.

If there is no existing EPA in place, you have to get a Living Power of Attorney (LPA) for both health and finances, but am less informed myself about that...

MM x

elantan wrote: »

Hi sorry to intrude but I saw your post and you sound like where I may find our family in the short to medium term and was just about to post asking advice ...

My Mil is starting to show more signs of dementia, she is not too bad yet but I feel its getting to the time we need to have the POA talk, I am unsure how to broach the subject, How do I say to her Mil maybe just now whilst you are good we should talk about the future, she is currently in denial that anything is wrong, she will happily say " oh my memory is terrible, I am getting worse" but when we have said to her things like " hey you've said that you feel your memory is getting worse, how about maybe talking to the Dr?" she always says no. no,

I dont want us to get to the stage where she gets really bad and will not be able to agree to a POA, we will always do our best for her and want to protect her, but I cant quite figure out how to broach the subject without upsetting her, sorry to be a pest but can I ask how you faced it ?

You seem to have everything organised and I know it is ahead of me, so would really appreciate some advice ....

Thanks

elantan

Thanks Miss Merlot, no I didnt know such a thing as a dementia forum even existed, so thank you very much for that I can ask there and not take over.

I will look into an EPA and try and take it from there, will need to plan on how and when to have this talk though.

Thank you very much xx

Miss_Merlot

Am really glad my question has led you to find the forum - I don't know what I'd have done without it!

Will probably see on there soon!

elantan wrote: »

Thanks Miss Merlot, no I didnt know such a thing as a dementia forum even existed, so thank you very much for that I can ask there and not take over.

I will look into an EPA and try and take it from there, will need to plan on how and when to have this talk though.

Thank you very much xx