Implications of selling or renting mum's house?

sqwiffy

I have no clue if i should post this here or elsewhere. If elsewhere, please let me know.

My mum had dementia for 7 years already and one of the family lived with her in mum's house. Mum, who's 90 then had a big stroke which has meant her needs increased and her home was not great for her. We moved her to my sister's house with the rest of us all sharing her care. Mum is now only getting the saving's part of pension credit plus attendance allowance. The relative in her house is moving out soon. I'm in a dilemma as to whether to rent or sell mum's house and save her money. Renting obviously has continued responsibilitiesand costs for maintaining her house and risks of people not looking after it, not paying the rent, etc, etc but would give her an additional income. If I sell the house, I could probably try to get a good rate of interest as we hope her income and savings should be enough for her outgoings without using that, unless she had to go into care. This is not the plan with the family support. I don't know if her getting the money for her terraced house means she'd have to pay something now to the state? 

Isthisforreal99

As the house is no longer your mothers main residence then there is tbe potential for Capital Gains tax the longer it is not occupied by her before it is sold.

Do you really know what being a landlord entails and the legal obligations etc, not to mention tax.

Unless the numbers really stack up for rental I would be personally looking to sell and invest. I assume someone has POA to take these decisions?

elsien

As  she’s no longer living in the property. it would  be taken into account in any financial assessment for care anyway, whether rented or sold. That would only apply if she was actually having care provided by the local authority, e.g. paid carers coming in, but with money from the property, she would be self funding for any carers anyway. 

Being a landlord is running a business - there is no room for sentiment. Firstly  you would need to get up to speed on your legal obligations, possibly paying out to bring the house up to an acceptable condition to rent, And then not getting upset if people treat the property in a way that your mum/family would hate. Plus all the usual implications of bad tenants et cetera.
I’m another one who thinks selling is probably the better option. 

HampshireH

Sell it. Don't become a landlord. You are already caring for your mum do you really need the added stress of becoming a landlord and everything associated with it

mta999

Another vote for selling - you are unlikely to make more renting it than investing the proceeds 

Grumpy_chap

sqwiffy said:

I have no clue if i should post this here or elsewhere. If elsewhere, please let me know.

My mum had dementia for 7 years already and one of the family lived with her in mum's house. Mum, who's 90 then had a big stroke which has meant her needs increased and her home was not great for her. We moved her to my sister's house with the rest of us all sharing her care. Mum is now only getting the saving's part of pension credit plus attendance allowance. The relative in her house is moving out soon. I'm in a dilemma as to whether to rent or sell mum's house and save her money. Renting obviously has continued responsibilitiesand costs for maintaining her house and risks of people not looking after it, not paying the rent, etc, etc but would give her an additional income. If I sell the house, I could probably try to get a good rate of interest as we hope her income and savings should be enough for her outgoings without using that, unless she had to go into care. This is not the plan with the family support. I don't know if her getting the money for her terraced house means she'd have to pay something now to the state? 

I assume that everything here is being done by someone acting under PoA.  That requires that decisions are taken with the primary interests of your mother first and foremost.

I am a LL and tend to be quite towards the "rent it" end of the commentators on the boards.  In this case, based upon the information shared, I also feel that the best thing to do in the circumstances would be to sell the house and release the capital for the mother to have the simplest finances and best standard of living that she can.

Any assessment of value made by the state would treat the value of the house the same whether the house is being let out or whether the proceeds from sale are in the bank.

BungalowBel

Sell it and invest the money for your mum's use.

As an ex small landlord who sold the property a year ago, I would say that as an inexperienced landlord, there are too many pitfalls and legislation to fall foul of, some of which means you can't give the tenants notice.  With the new legislation coming soon, being a small landlord will become even more onerous and if you only have the one property, more trouble than it is worth.

I say again, sell up.

Stubod

Sell it..you don't want to become a landlord!!!!

Albermarle

I don't know if her getting the money for her terraced house means she'd have to pay something now to the state? 

I am guessing that she would lose the pension credit, but I am not a benefits expert. 

 If I sell the house, I could probably try to get a good rate of interest 

Depending on the amount of money involved, you may have to split it over more than one account.
Assuming her only potential taxable income currently is her state pension, she could earn a large amount of interes without paying tax, so probably not necessary to use cash ISAs, just normal savings accounts which normally pay a bit more interest.

This link could be useful for future reference.

Savings | MoneySavingExpert

sqwiffy

Thank you all for your comments. I have POA and have of course been thinking of what's best for my mum financially as well as for her care. I informed Pension Credit when Mum moved out of her own home and they wanted to know if I was selling then. Of course I will speak to them about what could happen and I have to let them know of any changes.