inherited property advice... who to seek advice from?

getmore4less

newdave1975 wrote: »

2007 house value around 130k ...current 115k. Rent predicted around £500 pcm.
Dave

NO tax on the sale.

gross yield is 5.2% very marginal even self managing

With 11% Agents coming out thats down to 4.7% before other costs.

Unless there is cash in place allready to cover issues then most of the first years rent will need to be saved.

newdave1975

No capital gains tax to pay is good news. That tallys with what I've been told. I'm lost as to the latter part of your post, the gross yield that you talk about? Is that sort of like an interest rate, ie what you would make that you would get at a bank?
Also if we make around £450 from rental value (minus agent fee) per month, comes to around 5k? Would we need that much in reserve?
Dave

getmore4less

newdave1975 wrote: »

No capital gains tax to pay is good news. That tallys with what I've been told. I'm lost as to the latter part of your post, the gross yield that you talk about? Is that sort of like an interest rate, ie what you would make that you would get at a bank?
Also if we make around £450 from rental value (minus agent fee) per month, comes to around 5k? Would we need that much in reserve?
Dave

You won't see £5k after all the bills the letting agent comes up with that are not included in the 11%.

Unless you are planning to do the work yourselves you need a slush fund for at least 1 major repair, a few minor and a redecorate in place before you start using the money.

Then hope that you don't need it.

Yield is the fundimental measure for letting, clearly a lot more research needed.

newdave1975

Yes advice is what we need. So would you agree that an IFA is someone who can advice on the pros and cons of going about renting, looking at selling and tax/overall financial implications?
Dave

Keep_pedalling

What state is this house in? I would imagine that after being empty all this time it will need quite a bit spending on it before it is fit for habitation again, so quite a bit of expenditure required before any rental income can be generated.

If your aunt is quite elderly then I would have thought this is a no brainier to sell it, and use the capital to make her remaining years as comfortable as possible.

Gigervamp

I really think your aunt should sell it. Renting it out will be a major burden, even if she uses a letting agent to manage it. Just have a read of the threads on here about nightmare tenants and bad letting agents.

She should sell up and see a financial advisor to find the best place to put the money so that she can draw an income from it.

mufi

I found myself in a similar situation a couple of years ago, when in my late 50s. Having no wish to become an accidental landlord I sold, with no regrets.

Mossfarr

Dave,
I'm not going to criticise you about how you've got where you are today and I don't think anyone else should either. None of us know what you've been through so why should we think we have any right to judge??
Having got that off my chest.......
as a landlord myself, my personal opinion is your Aunt would be much better selling. Being a landlord is a lot of work and unfortunately there are an awful lot of very bad letting agents out there! Don't for one minute think that you sign up with them and leave everything to them and just bank the rent money. As a landlord you have legal responsibilities which are yours and yours alone - gas safety certificates & deposit protection for instance.
Have a look at the members forum on the Residential Landlords Association website (https://www.rla.org.uk) there are enough horror stories on there to send you running for the hills! There is also an abundance of fantastic advice for new or would be landlords. Their £80 (or so) annual membership fee is worth every penny.
Your Aunt just needs to do some research then make a decision.
mossfarr

Kynthia

So the letting agent will charge 11% of the monthly rent. Does that include everything, or is it 11% plus VAT, is there an additional fee of 1 months rent to find and vet a tenant, is the inventory and the quarterly inspections extra, etc?

newdave1975

Keep_pedalling wrote: »

What state is this house in? I would imagine that after being empty all this time it will need quite a bit spending on it before it is fit for habitation again, so quite a bit of expenditure required before any rental income can be generated.

If your aunt is quite elderly then I would have thought this is a no brainier to sell it, and use the capital to make her remaining years as comfortable as possible.

The state of the house is very good, she's been keeping it up to scratch regularly. My aunt is in her 60's but still very agile. I think the reason she is so cautious is because she lost out big time with the 2008 crash. All our investments and most she inherited were in the banking sector. Which as we say plummeted. I think with selling the 07 value was at its peak and since has dropped substantially. Renting she saw giving her an income until such time as house price improves.
Dave