Some advice needed on renting dilemma

AnotherJoe

If the savings run out by December, then as said it's pointless letting it out now. It might take 6 months to sell it anyway, and the OP cannot take the risk of a bad tenant that doesn't pay rent and won't move out, OP could find himself up for £1300 a month because if I was one if the sisters I sure as heck wouldn't be paying it as it was his bright idea to let !

A better compromise might be, get selling it now, then find a low maintenance flat, for say £150k or so, that will have a much better rental yield, plus will provide a much bigger buffer to run down, say three years or so.

Without wishing to be morbid, statistically that will very likely outlast dad.

harrys_dad

The sums from the OP are not correct. If the £45000 savings "are going to run out by December" then it is £1300 a week not £1300 a month, which seems more realistic, albeit very expensive. The rent from the house will come nowhere near covering this, neither will interest on investing the cash from a sale.

peter7769

Hi,

Sorry my mistake, yes it's £1300 per week not month, I know it won't cover the costs but just trying to eek out his savings as much as possible

Thanks Pete

AdrianC

peter7769 wrote: »

Sorry my mistake, yes it's £1300 per week not month, I know it won't cover the costs but just trying to eek out his savings as much as possible

You do not even have the savings to see you through to the end of an absolute minimum AST.

You have zero choice. Ignore the halfwit lettings agent, whose prime aim seems to be to sign a customer up, regardless of what's right for that customer.

Sell.

AnotherJoe

peter7769 wrote: »

Hi,

Sorry my mistake, yes it's £1300 per week not month, I know it won't cover the costs but just trying to eek out his savings as much as possible

Thanks Pete

You'll have the opposite effect, because there are costs to let it out, comply with a bunch of laws and then you'd pretty much have to get selling and evicting the tenant immediately, all costly items you wont get back in the first 6 months, with the possible horrendous scenario of a bad tenant leaving you with no income and having to find £1300/week.

Other than your sisters being ill-informed about the availability of "high interest" savings accounts as you are most likely going to be looking at 1.5 to 2% tops, they are completely correct, you should be selling this.

My suggestion of selling and buying one rental apartment also doesn't seem financially viable once the care home is per week, in that the other £150k would then perhaps last 3 years at best if supplemented by rental income, you'd need to review the situation and start eviction proceedings when you had about a year to go, so you have the buying and selling and other costs all spread over only two years, it might still be a wash financially, and probably not worth the hassle, do you need all that extra stress?

gettingtheresometime

Also consider the non monetary aspect.


How would you feel if the tenants trashed the place or did something to the garden (as was posted on here a few months ago) that you disagreed with?


It wouldn't be your dad's home or your childhood home but effectively a business.

rentmekid

Initially I was going to say rent out the property and then you and your siblings should make up the short fall in care home fees. However upon reading that the care home fees are £1300 per week and not per month, I would suggest sell asap!

MonkeyDr

Have you looked at an annuity?

When my gran went into a nursing home her house was sold and the proceeds were used to buy an annuity. The numbers were not wildly different from yours.

Obviously we were taking a bit of a punt of how long she would survive. It is now 2 years since the point where the original money would have run out, and she is still going strong at 97.

My gran's kids (my mum and uncle) had POA. They knew at the time the annuity was bought that it means zero inheritance, and are cool with that.

peter7769

Thanks to each and everyone of you for all your thoughts and advice, I will take it all into consideration and will be speaking to my sister's over the weekend and hopefully make a decision after that.

Thanks again

Pete

AnotherJoe

AIUI these are called an "immediate needs annuity" (they are very different to a standard pension annuity) and can only be bought via a specialist, I dont think they are sold retail. They require a medical assessment of the person for whom its bought. Could be a good option as it removes stress on your part.