Renovations on parental home, who is in a care home

morris369

Hi
Apologies if this is not in the right forum section.
My mother is in a care home, and on deferred payments from the council for care expenses, so we will need to sell/rent out the house at some point in the near future. Her home is not in a great state of repair and when it was briefly on the market, we were receiving offers well under the asking price because of its condition. My brother and I currently don't have enough time to spend getting it to a good state of repair for sale, but could potentially employ someone to do so. 
My question is how to fund such an option, as it's my mother's house, for the benefit of her care needs, but perhaps she is not legally responsible for funding renovation repairs. Would my brother and I take on the costs of the renovation? Would we be able to get home improvement loans (or a better advised route) for the renovation?
Many thanks for any advice in advance.

greatcrested

First off: do you have POA?

Generally speaking, the time, cost and stress involved in renovation is unlikely to really be fully recouped in the eventual sale price. Make it quicker/easier to sell? Yes, once completed.

But frankly you'd do better to reduce the price (is there a mortgage on it?) and get shot.

As for renting, all sorts of issues from the need to renovate first, to the 84 bits of legislatio you'd have to comply with, to tax, to risk of dodgy tenants to........

Reduce the price and sell.

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Slithery

In the vast majority of cases you won't make your money back on renovation/decorating costs - it will end up costing your more in the long run.

If the property isn't selling then that's because it's overpriced. Drop the price accordingly and it will sell.

frogglet

Just get it sold.  I know its heartbreaking selling a house of your parents especially if its the house you grew up in. My parents thought their house was worth far more than it was, so did our sibling.
Sell it and move on. We did.
 

hazyjo

It should be priced to take account of the work needed. If it was that keenly priced, the offers would have come in for more and there would have been a bidding war.

If you're still convinced it wasn't overpriced, try marketing higher then taking an offer so that psychologically someone thinks they got money off.

If as you say it was only marketed for a short while and there were numerous offers, then I can inclined to stick with the fact it wasn't overpriced though!

As they say, a house is worth what someone will pay. That is what sets its true value!

Doozergirl

What do you think it's worth? 

If it's house in Central
London, you won't lose by renovating, if it's in a deprived northern town you won't gain.  There are varying degrees in the middle but I'd say that a house needs to be worth significantly more than the UK average for you to gain anything via renovation.

Value is added by increasing the square footage, but that is also dictated by the price of building work compared to the price per square metre of local property.  

morris369

Thank you for all your comments. Yes I have POA, and no real attachment to the house as I didn't grow up there. There is no mortgage on it. I thought that perhaps retaining it as an asset made more sense, and just wondered if the POA gave me the legal ability to renovate it for perhaps rental. It's in a good location.

elsien

You are obliged to act in your mother’s best interests. So however any potential renovations are initially funded, they’re going to come out of your mother’s assets at some point. Even if you and your brother pay for now, or get a loan, you’re going to be expecting that money back.
So aside from all the potential hassle and obligations of being a landlord, you need to do your sums very carefully to ensure that mum doesn’t lose out. And if you’re genuinely looking at rental, factor in the voids/expenses for non paying tenants and that at present it will be many many months before anyone can be legally evicted.

BikingBud

Doozergirl said:

What do you think it's worth? 

If it's house in Central
London, you won't lose by renovating, if it's in a deprived northern town you won't gain.  

Deprived northern town! What a condescending stereotype.

Some significant gains % wise can be made by adding a much smaller sum due to none of the contrived and excessive pricing considerations of supposedly "well off" and "better" areas! 

But that's not the required answer here though is it.  The point is that any money invested is likely to be lost directly or indirectly. It may not return in the value of the house or if it does it will likely go towards paying for the care home fees.

AdrianC

BikingBud said:

Doozergirl said:

What do you think it's worth? 

If it's house in Central
London, you won't lose by renovating, if it's in a deprived northern town you won't gain.  

Deprived northern town! What a condescending stereotype.

Seems to be no more or less a stereotype than "central London", more of an illustration. If it's somewhere that decent-size houses go for <£100k, then there simply isn't going to be the margin available to recoup anything but nominal investment.

GDB2222

BikingBud said:

Doozergirl said:

What do you think it's worth? 

If it's house in Central
London, you won't lose by renovating, if it's in a deprived northern town you won't gain.  

Deprived northern town! What a condescending stereotype.

Some significant gains % wise can be made by adding a much smaller sum due to none of the contrived and excessive pricing considerations of supposedly "well off" and "better" areas! 

But that's not the required answer here though is it.  The point is that any money invested is likely to be lost directly or indirectly. It may not return in the value of the house or if it does it will likely go towards paying for the care home fees.

The point is that the work costs much the same whether the house is worth £50k or £500k., but the scope to increase value is more likely to be there for the more expensive house. I agree that the location doesn’t matter. 

Although if you know of any houses going for £50k in London, I’d love to hear from you.