Take a risk or simplify life?

steampowered

Why is she expecting to keep both the home and the rental property?

Marital assets are normally split 50/50. Are there also assets which the husband is keeping? 

The other REALLY  REALLY IMPORTANT issue missing from your post is about what the pension situation is. The husband's pension pot is probably worth more than the rental property. Given that she is not working, unless she fancies living in poverty as she gets older, she needs to think about that.

Happy_planner

Thanks all, very helpful comments. The rental yield is about 4% and nets £15k pa. A two percentage point increase in interest rates would reduce that to about £5k though (across both mortgages), and that doesn't factor in big one-off expenses. Good point about benefits eligibility and pension. As far as I know neither of them have pensions so that's another things to put on the planning list. I'll pass all this feedback on to her. Thanks again! 

AdrianC

Happy_planner said:

The rental yield is about 4% and nets £15k pa.

That's net of all expenditure, including the mortgage interest, management fees (or will she self-manage?), post-tax? Actual cash-in-pocket? (Albeit before any mortgage capital repayments)

So, at a wet-finger guess, about £1,700/mo gross rent?

Voids or non-paying tenants are very quickly going to make a dent in domestic finances at that rate.

Thrugelmir

Has her to be ex agreed to this division of assets? Has a number of very apparent flaws. 

Happy_planner

Yes agree voids and big bills make this very risky. This would be a 50:50 split with her ex keeping other assets they own. The problem is he is taking most of the cash. In her shoes I'd rather have the cash than illiquid property investments. 

TBagpuss

Another option of course would be for her to sell the rental property and invest the proceeds elsewhere - she might benefit from talking to a fincial adviser about other options. She could also think about selling and using some of the funds to reduce the mortgage on the family home and some to invest elsewhere with a view to growth but also accessibility of the capital if she needs it.

Also - she should be talking to her solicitors about what assets her husband is retaining, if she is to have the house and a rental property/ Are those specific assets the best assets from the overall 'pot' for her to retain? 

 How old are the children, and when does she anticipate being able to return to at least part time work?