mums pen lump to invest

pauline123456

My mum lives in a house rent free that my gran left me and my siblings in a family trust about 15 yrs back. My mum as just got a pension lump some of 200k and approx. savings of 80k , she is thinking of buying a bungalow as she as never been a home owner . she wants to rent it out while she still lives in the trust property ,with a view of moving into it later down the line, if she struggles when getting older . she is a widow as well .
any views if this is a good idea , thanks

pauline123456

no one got any views

Albermarle

no one got any views

Yes you are a bit impatient:D

bostonerimus

Being a landlord comes with responsibilities and it locks up capital. It might sound nice to get that rental income, but you need to run the numbers to see if it's a good investment.

cloud_dog

pauline123456 wrote: »

My mum lives in a house rent free that my gran left me and my siblings in a family trust about 15 yrs back. My mum as just got a pension lump some of 200k and approx. savings of 80k , she is thinking of buying a bungalow as she as never been a home owner . she wants to rent it out while she still lives in the trust property ,with a view of moving into it later down the line, if she struggles when getting older . she is a widow as well .
any views if this is a good idea , thanks

Why not simply look after the money and buy a property when she wants/needs to buy a property?

atush

She needs to find out if there are bungalows in the area for 200K, and what the market rent would be, less any property management (unless one of you children wants to help out with this). How soon would she need to move in, or is she of robust health at the moment?

If she has 80K, plus pensions to come (does she?) then it could be an idea. Hard to say.

Alice_Holt

Being a landlord is an onerous business.
The tax treatment is now unfavourable.
How does your mother know what her needs will be when see can't cope with a house?
She may find the bungalow unsuitable for her circumstances.
Frankly, it is more likely to become an millstone round her neck than an asset.

Why not use the money to make the most of her life now?

pauline123456

its just one option she looking at , idea in getting the bungalow is she is not a home owner as explained above , it would buy the property at that price and if bungalows keep going up in price she would have already got it so no need to find anymore money to get one, or if she decided to sell she could make some money on it tax free as been her only property plus rental income .
brothers rent property out already so that is covered.
This was her idea , she will be paying 40% tax in reirement so putting it in savings wouldnt be good ISA usless at mo .
We would sell the trust property but we cant not in our hands

Albermarle

As mentioned in the other thread and the one before that from your Mother . You are asking a lot of different questions about quite large investments ; pensions; tax; houses in trust; rental properties etc and a good IFA will be of more help than a lot of random answers on an internet forum , even if we try to be as helpful as possible.

pauline123456

we get that drift now, its more of what questions to ask (as youve probably guessed not our field )and find the right person to trust . In regards to the family trust totally sep issue to mum, but what as happened with that trust over 30 yrs is what as made us ask a lot of questions on here first.
mum issue came to light about five months back .

MaxiRobriguez

I'd hazard a guess it's harder to rent a bungalow than any other type of house.

Most renters are young people, young people aren't looking for bungalows. Older people who do want bungalows are asset heavy in comparison, so can afford to buy their own.