An Inherited Property - Sell, Rent or Keep ?

lookforwards

Hello

I’ve recently inherited a three bedroom house from my parents and was considering what I should do next, should I sell the property, rent it out, or keep it empty for a while as an investment.

I’m 55 years old and already have my own home with no mortgage. Fortunately I am financially secure and so in the medium term don’t need the extra cash the sale of the inherited property would provide.

A friend advised me not to rent it out since that would be a lot of hassle, and since I already own the house, it’s not like the rent would be paying off a mortgage. At my age just sell the property and invest the proceeds.

Alternatively I could keep it empty for a while to see if property prices rise before selling. I live in the Midlands and in recent times prices have been rising.

Does anyone have some advice please on my next move?

kazwookie

I personally would sell it, and invest in something I am interested in.

While you make up your mind over what you are going to do with the house, make sure you have it well insured, as empty house can attract 'no gooders', make sure the insurance company know it is empty, I would also suggest turning off water/ gas /electric, and draining down the tanks.
It may also be worth paying a local gardening company to go once a, week or so and cut lawns and tidy up around.

hazyjo

I have no desire to be a landlord so would sell. My personal view though - not really for me to say what's right for you.


If you had no desire of getting into being a LL and all it entails, I would seriously think about selling. Check out the search facility, or just read through posts over the first 5 pages as there are always loads of similar ones or posts from 'accidental landlords' (a term not exactly favoured on here lol) who come on here after making loads of errors after not doing enough homework before venturing into the letting business.

Linton

I suggest you sell it asap and invest the money in something that doesnt need insurance, weekly inspections, ongoing maintenance, and cause a continuous nagging worry about its physical security.


To expand on Kazwookie's contribution, an empty house could be comparatively expensive to insure and the insurer will impose requirements such as draining water, turning off utilities and weekly internal inspections.

PasturesNew

Sell it. The fact you're asking means you've never had a burning desire to be a landlord - and a landlord of that sort of house in that area. Also, you'll be emotionally involved with the house and who is living there/what they're doing.

Sell it.... you don't have to do anything spectacular with the money - it can wait until you're ready to "move on".

silvercar

Another option would be to rent it out using managing agents. Less profit for you but also less hassle. It depends on your view on rental yield compared to other investment yields and your view on the potential growth in property values in your area.

phill99

One thing worse than having a let property is having an empty property.


You will still have expenses on it - council tax, minimal electricity and gas etc. Your insurance will be very expensive and typically will require all services to be drained down etc.


Additionally all of those little maintenance jobs that you normally notice will go unnoticed and will soon escalate. Plus it will attract burglars, squatters etc. I would seriously not encourage you to hold an empty property.


That leaves two options: Sell or rent.


Sell it, put the money in the bank, have a round the world cruise, indulge your hobbies, buy your self an annuity, add to your pension pot, give the money to the Dogs Trust etc. Whatever you want.


Rent it out and become an accidental landlord and manage it via an agent. Or rent it to a guaranteed income provider or the council / Housing Association who then sub let it and they take all the hassle out of the letting and you just take an income (albeit a slightly reduced income).


But having it empty is really a no go.

lisyloo

I would sell.
Being a lanldord is a job in itself. Some issues might need dealing with urgently e.g. leak, lack of hot water and there are a lot of regulations now regarding money laundering, right to be in the country, safety checks etc. as well as fewer tax breaks. Of course you can delegate a certain amount but that eats into profits.


I'd sell and invest into something that suits you and also consider your bucket list. Mine includes a trip to the southern hemisphere and re-decorating my house.

AnotherJoe

The classic question to this is as follows,


Lets say that your parents left you £200k cash instead of a house that is worth £200k.
Would you decide to become a landlord. Would you buy this exact house to let out? Or even this type of house, ega 3 bed detached or whatever it is. Would your business* do better if you bought and let out two £100k flats, or 4 £100k flats all 50% mortgaged to get the tax relief etc. Or two, 2 bed new builds with less maintenance. or or or. ........

So, almost certainly even if you wish to be a LL, the answer is almost certain that this is not the best house to let out, but there are better alternatives. So to start with you should sell it anyway.



* yes, it is an actual business with lots of legal requirements, rules and regulations, tax forms etc even if you have an agent run it

Cakeguts

Sell it. I am a landlord and our properties are carefully researched before being bought to be in the area and type of property that will attract good tenants. The house you have might make a good rental investment but it might not and it is the might not that is the problem. If it doesn't it will just be a lot of hassle.



If you want to become a landlord you need to buy a property that is suitable for that purpose.

Stubod

We had the same, inherited a house from wife's family. As we didn't need the money (at the moment) we decided to rent it out. Key for us was that its was a relatively new build of good quality and in good condition. ie we do not anticipate any major issues given the condition of the property and it is fairly local to us so we can keep an eye on things or do any little jobs that may need doing.

We do use an agent to fully manage it at a cost of 10%. ie we do not really have anything to do although we do keep in regular contact with the tenant who so far has been really good. The actual return is not that brilliant, (about 3.5%), but it's better than any current account and still beats inflation. Plus we hope the value of the property will go up over time.

So I suppose it depends on your personal situation, eg what other funds / debts you have, whether or not you want the hassle / uncertainty of possible bad / or no tenants?

We are happy (so far) with our decision to rent through an agent. (Would not do it "on my own). We have a small monthly income which was totally "unplanned", and asset that will hopefully increase in value, (if only slightly).