Rent or sell inherited house

gundo

My mother died just recently and I'm now in the process of dealing with her estate and getting probate etc.

I actually live next door my late mother and the house (3 bed) is a link detached which is linked to my house. It was a coincidence that I sold mine as her neighbour was selling his and my Mum was pretty frail and needed more and more care from me (I'm an only child and her only family in UK) so I bought it 3 years ago.

I don't actually like my house very much despite having spent some £18K renovating it to a certain extent, last year. The houses aren't identical and Mum's house is actually bigger and I prefer the layout (in my cul-de-sac all the houses have this strange left and right difference). But Mum's house needs work, a new kitchen, a new bathroom, new boiler and redecorating completely. It has new windows (they were fitted 2 years ago). It also has a larger driveway whereas mine is very narrow.

Anyway I'm in a quandary as to what to do. I have some savings (though not much - and I have a mortgage on my property with £50K to go) and I could use my savings to get my Mum's place up to scratch (I'm not looking for a Premiership footballer's house, just basic, clean and functioning) and then move into her house and rent out my own, which is now relatively "up together".

I had an estate agent round and they specialise in a guaranteed rent scheme. They estimated that roughly my Mum's place is worth £250K and mine £300K. They described me as a "reluctant landlord" which I think is an accurate description.

I know I'm in an extremely fortunate position of having been gifted a house (not something I expected or banked on happening - I assumed my Mum would go eventually into a care home and her house would have funded that) and I want to make sure that I don't throw this gift from my parents away (my father died 12 years ago and my mother has lived alone there since). I want to make sure I extract the most benefit from it. For additional background I'm single with no dependants, living on my own.

The estate agent and a friend both suggested that perhaps I'd be better selling both places and finding somewhere I really love, that's more modern (the house is 1970) and with very little maintenance to do (I hate DIY and I'm useless at it, I rather pursue my hobbies) and then bank the rest and enjoy life.

Obviously I'm thinking that the extra income from renting would be nice (my house would then be self funding - the rent more than covering the remaining mortgage) and then if I get fed up or want the cash I can sell it and hopefully it will have gone up in value.

I'd be interested to know what people's opinions are and/or if they can suggest other options/solutions.

I do appreciate that I am extremely lucky to have such a decision to make.

missprice

What can we say?
Have you looked into renting? Do you know what hoops you have to jump through, do you know any of the costs involved?
It can't be done for you.
There is a sticky thread you should have a look at. If you can plough through all the links and then have questions fine. If you can't even plough through the links then I don't think you are landlord material.
But what do I know?

gundo

missprice wrote: »

What can we say?
Have you looked into renting? Do you know what hoops you have to jump through, do you know any of the costs involved?
It can't be done for you.
There is a sticky thread you should have a look at. If you can plough through all the links and then have questions fine. If you can't even plough through the links then I don't think you are landlord material.
But what do I know?

Yes I have looked into the costs involved. I did plough through the sticky thread.

Thanks for your help.

missprice

Ok well I'm about to be pprd, so
You seem ok with being called a 'reluctant landlord.
Is that ok for prospective tenants? Would you want to be the tenant with the reluctant landlord?
If it's money, then do the maths, it's not difficult. If it is difficult for you then best not become a landlord.

AndyTails

You describe yourself as a reluctant landlord - that to me speaks volumes as to whether it's right for you or not.

There is absolutely nothing compelling you to be a landlord just because you currently own two properties. It sounds like your net worth is currently £500k. You need to forget you have two houses currently, and ask yourself what you'd do if you had £500k and no house. Would you buy yourself a great house? A large house in need of work, to do up as a project? Two good houses, one to live in and one to rent out? If you would buy yourself a rental property, then by all means go down the landlord route. But if you wouldn't, then the stress of selling a house is much less than that of being a landlord!

So become a landlord if it's what you want to do; don't do it if you're reluctant to do so. Invest in the stock market instead. Or invest in a company that invests in property itself. Or find a bank account or ten that can vaguely keep up with inflation.

xylophone

You don't particularly want to be a landlord so why bother?

Sell your own property and move into your late mother's - you'll have plenty of cash to fund the renovations and some to deposit/invest.

You might then sell the renovated property and buy your ideal home?

SandraX

Sell both, move to a house/area you like but don't spend all of the money on one house, but a flat with about 150/180k and use that as an income to support your lifestyle/pension/etc. This flat, try to buy one in a nice area close to station/stops/etc and one if possible where the building management agents won't let you let it out to someone who is not working.

ATB

ps - check service charges and the history of service charges and try and avoid a flat with lifts in as service charges are high. Then use a letting agent but also try to buy this place near your new home as easier to get repairs done yourself as cheaper than agents.

theoretica

missprice wrote: »

What can we say?
Have you looked into renting? Do you know what hoops you have to jump through, do you know any of the costs involved?
It can't be done for you.
There is a sticky thread you should have a look at. If you can plough through all the links and then have questions fine. If you can't even plough through the links then I don't think you are landlord material.
But what do I know?

Are you sure about that? I haven't looked into it, but see plenty of ads from agencies implying it can be done for you and they will take on everything and just send the house owner the money/bills - obviously after their costs!

Slithery

It doesn't matter what they say they'll do. It's still you that's legally responsible.

Agent fails to protect the deposit - you're liable.
Agent fails to get safety checks done - you're the one that can be prosecuted.
etc, etc, etc...

Did you really read G_M's sticky? It has a section all about this...
https://forums.moneysavingexpert.com/showpost.php?p=67759934&postcount=8

AdrianC

AndyTails wrote: »

There is absolutely nothing compelling you to be a landlord just because you currently own two properties. It sounds like your net worth is currently £500k. You need to forget you have two houses currently, and ask yourself what you'd do if you had £500k and no house. Would you buy yourself a great house? A large house in need of work, to do up as a project? Two good houses, one to live in and one to rent out?

*THIS*, with bells on.


Also... If you decided that, yes, you do want to live in your late mother's house, refurbished, and have a BtL with the other £250k of your assets... then would you spend that £250k on buying THAT house, in that condition, to do it? You'll have zero savings left, you said? Also - do you want your tenants right next door? Do THEY want their landlord right next door?

You've said you don't much like that property. So isn't this a golden opportunity to not live there any more? You don't have the tie of your ailing mother, and you have a great opportunity to break the chain, too.

theoretica wrote: »

Are you sure about that? I haven't looked into it, but see plenty of ads from agencies implying it can be done for you and they will take on everything and just send the house owner the money/bills - obviously after their costs!

That's about as close to "getting somebody to do it for you" as you can get. But... They aren't putting your interests first. They're putting their income first. They'll not get you best value on any work, for a start. And you're still ultimately liable.

In return for giving up a large chunk of what's probably not a great yield anyway.

So you rent this property, and give a chunk of the rent straight to an agent in return for fleecing you on any work needed. What's your return now? 3%? How much are you allowing for maintenance/upgrading/voids/repairs?

You can get better return than that without the hassle.

getmore4less

Crunch the rental business numbers.
Start with gross yield.

Would you have bought either place as a rental if you did not own then?