Advice on whether to ‘do up’ interested house

Brie

I did think you might at least get the roof fixed but that's likely to be £20k perhaps.  So my suggestion is to have a look at what else is in that neighbourhood.  Lots of old homes, some good, some bad?  Some old places and other replaced with new builds?  If there's a number of new builds I would wonder about doing any work if it's likely to be a good place for a builder to put in a block of flats or something else shiny new.  Your £20k roof would be a complete waste.  

Doozergirl

seans_elysees said:

RAS said:

Worth checking the CGT situation and SDLT before you even take ownership.

Firstly, the deceased's estate had no liability for CGT up to their death, but if the property increases in value between death and sale, the estate may have a liability.

If you take ownership:

You become liable for any CGT on increase in value during your ownership unless it is your primary residence. You can't reduce this by making repairs, only capital improvements. So that eats into any profit.
If you don't already own property, you lose your first time buyer status regarding SDLT.
You'll be liable for Council Tax, possibly at an enhanced rate.

It could be much better for the estate to sell the house directly rather than transfer it to you.

It may be worth just getting a quick fix of the roof to prevent further deterioration given we are heading into winter, if it's a few missing tiles or rotten flashing. Clear junk and a basic clean. Clean the windows if you can reach them?

And air the place if you are visiting. 

Thanks. 

Who decides on the current house value for legal purposes? I had initial meeting with lawyer (who held the will) this morning. Neighbouring property sales over the last 5 years are avg £70-80k , with one outlier about £115k. Lawyer talked about putting in the est. value. Is it as simple as that?

It’s clearly not going near IHT thresholds and there’s no other assets in estate and only £5k cash. 

Time-served builder/developer here. 

With those values, I would not bother touching it.  It will cost far more to fix than you will improve the value by and it also takes time, which is money.  

That house would cost much more to build now from scratch than it would sell for.  It needs someone who will take the work on themselves.  

Grumpy_chap

seans_elysees said:

I’m about to legally inherit a 2 bedroom house and it’s in somewhat disrepair. 

The roof is needing an immediate fix to make water right, and resultant damage to one bedroom ceiling needs work. Windows are single glazing and very poor state. Bathroom is archaic and needs completely ripped out. The other general condition is probably needing plasterwork, electrics checked and a good clean and redecoration from top to bottom. 

Is there a % return I should realistically be considering when evaluating spending on repairs. I.e. if I’m spending £15k to make £30k then that’s maybe worthwhile, but not so much if my return is only £5k profit. 

seans_elysees said:

Neighbouring property sales over the last 5 years are avg £70-80k , with one outlier about £115k.

Sell it at auction and be done.

If you spend £15k, and with those house price values, you will never recover the outlay, far less make a profit. 

You also risk spending "pointlessly" in so far as you fit out the bathroom so it is no longer "archaic" but the new owner doesn't like your choice, the new owner would have been better with the old bathroom and fit new to suit their preferences.

Sounds like the type of property to see on a day time TV show, where someone will buy for £50k, re-roof, new windows, new kitchen, bathroom, a massive extension, new central heating, full rewire, full redecoration, landscape the garden all for the cost of two pints of lager and a packet of crisps.  Then sell for half-a-billion-pounds.

seans_elysees

Thanks all for the advice. Much appreciated. 

I think that gives me the good idea of the consensus to not get embroiled in any sort of project. 

I expect that my first port of call is to estate agents now to get an indication on where I stand value wise. And while I won’t replace the roof (based on advice received) I imagine I’ll still need to get a fix to make the place water tight again.  

FreeBear

seans_elysees said: And while I won’t replace the roof (based on advice received) I imagine I’ll still need to get a fix to make the place water tight again.  

It wouldn't hurt to get a local roofer to take a look. It might be nothing more than a couple of slipped/broken tiles/slates. Maybe a £50 fix - Hard to tell from this distance without any photos.

Grizebeck

Make it water tight on a temporary basis but nothing else given the time it will take to go through probate

Klinny

Potential idea is that you could do it up and rent it out. Use it as a source of passive income and overtime it can pay off the cost of doing it up. 

BikingBud

Klinny said:

Potential idea is that you could do it up and rent it out. Use it as a source of passive income and overtime it can pay off the cost of doing it up. 

Think very carefully and ensure you are fully aware of all the obligations of doing this.

Do not become an "accidental" landlord.

Albermarle

Klinny said:

Potential idea is that you could do it up and rent it out. Use it as a source of passive income and overtime it can pay off the cost of doing it up. 

The OP has no experience of doing up properties and no experience of being a landlord( as far as we know) so a lot of potential hassles for them.
Much easier to sell it as is and put the money in an ISA or Pension. Just a few clicks on a screen.

FreeBear

Albermarle said:

Klinny said:

Potential idea is that you could do it up and rent it out. Use it as a source of passive income and overtime it can pay off the cost of doing it up. 

The OP has no experience of doing up properties and no experience of being a landlord( as far as we know) so a lot of potential hassles for them.
Much easier to sell it as is and put the money in an ISA or Pension. Just a few clicks on a screen.

With property values around £80K, it suggests the house is in a depressed area (Ashington ?) - Rents are unlikely to be very high (say £600/mo). After expenses, I would agree, an ISA or pension would likely provide better returns and be tax free.