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  • FIRST POST
    • lizeratsi
    • By lizeratsi 9th May 18, 10:23 AM
    • 58Posts
    • 3Thanks
    lizeratsi
    No pension ? inherited flat and shop but flat needs work.
    • #1
    • 9th May 18, 10:23 AM
    No pension ? inherited flat and shop but flat needs work. 9th May 18 at 10:23 AM
    I have been left flat and shop. Combined the site is worth between 130 and 140 Max.

    The flat needs about 10 grands worth of work, which I dont have Im a stay at home parent and husband earns 25 grand a year.

    we have two children.

    I have to pay council tax and bills on the flat.

    If I create a leasehold and sell the flat - I still have to separate the water which is a few thousand, pay for the leasehold, the flat was valued at 40 grand. I have a potential buyer for the flat.

    Which means I retrain the freehold and keep the shop which I think gives a good income.

    But the sale may go sour - if I sold the whole thing what other investments could give me that 600 pm yield.
    The flat is hundreds of miles away and may not be mortgable for me to get loans and currently I am not working.

    WWYD? thank you . I have no pension and no proper career to return too once children old enough it will be low paid work thanks.

    ( my initial idea was to get some money into a SIPP) from flat sale - and ISA stocks and shares then once other monies paid eg splitting water to top up from other rent.
Page 1
    • kidmugsy
    • By kidmugsy 9th May 18, 11:10 AM
    • 10,529 Posts
    • 7,212 Thanks
    kidmugsy
    • #2
    • 9th May 18, 11:10 AM
    • #2
    • 9th May 18, 11:10 AM
    I'd see if I could persuade the flat buyer to pay for the plumbing in return for a price reduction on the flat. Or I might decide that running property that's hundreds of miles away is not appealing for an inexperienced and busy mother of two, and just sell up as is.

    Do you own your own house? If not, buying a house for yourselves may be a particularly good use for the capital. If you do, would paying off some of the mortgage get you a usefully lower interest rate by virtue of reducing the loan-to-value? Or, could you use the money to move to a bigger house and then take in a lodger? That might be a neat way to get extra income for the pair of you, with no tax to pay on it.

    Or, if you are keen on owning and letting property, could the 130k be used to buy something profitable near where you live? I don't know the state of play now but there was a time when buying lock-up garages seemed a profitable use for capital. I suspect that your present notion of letting business property rather than residential property might be wise.
    Free the dunston one next time too.
    • Zanderman
    • By Zanderman 9th May 18, 11:25 AM
    • 1,520 Posts
    • 4,019 Thanks
    Zanderman
    • #3
    • 9th May 18, 11:25 AM
    • #3
    • 9th May 18, 11:25 AM
    Your two threads on this today - this one (https://forums.moneysavingexpert.com/showthread.php?t=5840422) and this one: https://forums.moneysavingexpert.com/showthread.php?t=5840420 seem similar to the thread you started last year here: https://forums.moneysavingexpert.com/showthread.php?t=5667966

    If they're all about the same flat perhaps you would get better results and responses by using just one thread!
    • lizeratsi
    • By lizeratsi 9th May 18, 11:31 AM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    • #4
    • 9th May 18, 11:31 AM
    • #4
    • 9th May 18, 11:31 AM
    Yes I have two threads because One is asking can I get a yield of 666 from investments and one is asking about the fact I have no pension.

    The over all property is worth minimum 130 K.

    The shop side is fairly low in put from me, I would not really want to rent someone a home however - the manegment fee - the thousands to do it up.

    We own our own home, we have low mortgage - rate about 2.3 % and about 50 left to pay.

    If I sold the whole thing I could move or do much needed kitchen extension/ or just new kicthen but extension would dramatically improve our day to day life.

    But I would be scared of loosing the value of the money where in property its safe...

    The shop by itself is great but the flat - being run down needing work - makes my heart sink. I am not DIY savvy, DH is useless, we struggle with diy in our own home it took us ten years to work out how to get a new tap in the kitchen.
    • robber2
    • By robber2 9th May 18, 11:58 AM
    • 344 Posts
    • 284 Thanks
    robber2
    • #5
    • 9th May 18, 11:58 AM
    • #5
    • 9th May 18, 11:58 AM
    Sounds like its causing you all sorts of stress and hassle already.

    I'd just sell the whole lot and be done with it then either use the cash for a Buy to Let or drip feed it into SIPPS for you and your partner.

    Rob
    • xylophone
    • By xylophone 9th May 18, 12:20 PM
    • 25,371 Posts
    • 14,967 Thanks
    xylophone
    • #6
    • 9th May 18, 12:20 PM
    • #6
    • 9th May 18, 12:20 PM
    where in property its safe...
    Um...

    I am not DIY savvy, DH is useless, we struggle with diy in our own home it took us ten years to work out how to get a new tap in the kitchen.
    You have no experience in managing property? Do you want to be a landlord with the hassle involved?

    Could you not just sell and use the money for professional work on your home and also consider saving for your retirement through a pension?
    • Dox
    • By Dox 9th May 18, 12:21 PM
    • 507 Posts
    • 301 Thanks
    Dox
    • #7
    • 9th May 18, 12:21 PM
    • #7
    • 9th May 18, 12:21 PM
    Sell and be done.
    • Paul_Herring
    • By Paul_Herring 9th May 18, 12:44 PM
    • 6,281 Posts
    • 2,996 Thanks
    Paul_Herring
    • #8
    • 9th May 18, 12:44 PM
    • #8
    • 9th May 18, 12:44 PM
    WWYD
    Personally? Sell it. At auction if necessary.

    It's hundreds of miles away, no experience at running a rental property, and at best it's going to be a constant worry.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
    • Lungboy
    • By Lungboy 9th May 18, 12:52 PM
    • 1,361 Posts
    • 1,312 Thanks
    Lungboy
    • #9
    • 9th May 18, 12:52 PM
    • #9
    • 9th May 18, 12:52 PM
    in property its safe...
    Originally posted by lizeratsi
    Why do you think that?
    • A Nice Englishman
    • By A Nice Englishman 9th May 18, 12:58 PM
    • 1,953 Posts
    • 932 Thanks
    A Nice Englishman
    Commercial property is far from safe. Shops are closing down every day.

    I'd sell the shop and flat as is, pay off your mortgage and make the improvements you want to your house.

    Use some of the surplus to invest in yourself to increase your earning potential through study/training,

    Once you're in a (hopefully we'll-paid) job put as much as you can into your pension, and get your husband to do the same baring in mind you'll have no mortgage to pay.

    Use the rest of the sale proceeds for some luxuries and as a nest egg for the children when they go to university/get married/ buy property / whatever.
    Last edited by A Nice Englishman; 09-05-2018 at 1:07 PM.
    • lizeratsi
    • By lizeratsi 9th May 18, 1:22 PM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    The shop is actually in a good site and has never been empty for a long time. 4 months, 5 months max over ten - 20 years but of course there is always a first time.

    I was told whatever the shop only value is - say 80 ( probably less than that) putting that into stocks and shares would never give back the yield the shop does .

    I am quoting here I am struggling to navigate my way round all this.
    • lizeratsi
    • By lizeratsi 9th May 18, 1:26 PM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    I thought I could save into pension from the money from the shop.

    Its the flat that needs work not really the shop.
    • Mojisola
    • By Mojisola 9th May 18, 1:30 PM
    • 29,243 Posts
    • 74,702 Thanks
    Mojisola
    You seem to want to keep the shop even though almost everyone is suggesting it makes more sense to sell.
    • justme111
    • By justme111 9th May 18, 1:38 PM
    • 2,987 Posts
    • 2,877 Thanks
    justme111
    so what stops you from selling the apartment and keeping the shop?
    • A Nice Englishman
    • By A Nice Englishman 9th May 18, 1:48 PM
    • 1,953 Posts
    • 932 Thanks
    A Nice Englishman
    Look at it another way. If you inherited 140,000 cash would you think "I know, I'll buy a shop hundreds of miles away with a run-down flat above"?

    Or if you had no mortgage on your house would you take one out to buy that shop?
    • lizeratsi
    • By lizeratsi 9th May 18, 2:28 PM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    @justme111 the thing is the flat and shop are not totally separated eg the water supply is one....the meter for the leccy is in the shop - which is the flats.
    The leccy is separated...

    The shop itself seems pretty low maintenance...if it was just a shop it would be a no brainer to hold onto it.

    its giving myself and my husband an additional income of 600 a month.

    but I have to pay cT on empty flat...flat needs work.

    nothing is ever easy. My friend has her heart set on the flat but she doesnt understand the other issues. I wonder where I could put that money to yield 600 a month.

    Idea to re train is certainly interesting...im 42 though!
    • lizeratsi
    • By lizeratsi 9th May 18, 2:29 PM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    Nice English man - no not at all on the flat side but the shop

    ...Im scared if I sold it I would make the wrong move and be left with nothing in old age or even in a few years, Ie invest it badly
    • kidmugsy
    • By kidmugsy 9th May 18, 2:37 PM
    • 10,529 Posts
    • 7,212 Thanks
    kidmugsy
    ...Im scared if I sold it I would make the wrong move and be left with nothing in old age or even in a few years, Ie invest it badly
    Originally posted by lizeratsi
    But if you spread your capital over (i) paying down your mortgage, (ii) building your extension (or moving house), (iii) high interest current accounts and regular savers, and (iv) equity investments within pensions and S&S ISAs, wouldn't you feel that your money is much more diversified and therefore more secure than if it were all invested in one distant building?

    In your shoes I'd pay particular heed to The Nice Englishman.
    Free the dunston one next time too.
    • justme111
    • By justme111 9th May 18, 3:39 PM
    • 2,987 Posts
    • 2,877 Thanks
    justme111
    @justme111 the thing is the flat and shop are not totally separated eg the water supply is one....the meter for the leccy is in the shop - which is the flats.
    The leccy is separated...

    The shop itself seems pretty low maintenance...if it was just a shop it would be a no brainer to hold onto it.
    !
    Originally posted by lizeratsi
    right. so we getting somewhere - selling flat but not shop is not that simple. you may argue how good that idea is till we all blue in the face but if you can not/ do not want to arrange it what is the point of considering it? If we say " good idea , so do it" you respond " I do not feel I can.". If we say " do not do it, sell the lot " you respond " but thats the best return I can get on my money. "
    Your options are : .
    -accepting that you are out of your depth and will likely not get the best return
    - organise everything without stressing as although you pay council tax the shops rent still gets you profit.
    - continue stressing about it and likely lose money as decisions taken under stress are usually not that good financially since the emotional side takes the precedence over financial- survival instinct of human psychis.
    If you ground yourself into the ground with feeling of inadequacy because you can not manage it you are likely to lose it because you will subconsciously sabotage the whole issue to try to protect your emotional health.
    I understand a rental with a known good history and good return is tempting to keep but if you do not manage it than you do not, the alternative of lower return as described by kidmugsy in a post above is still pretty good and you being happy is more important than 2% difference in return. besides don't forget - we do not have a crystal ball , at the end the income the shop brings may turn out to be less than bank account.
    Last edited by justme111; 09-05-2018 at 3:44 PM.
    • lizeratsi
    • By lizeratsi 9th May 18, 3:54 PM
    • 58 Posts
    • 3 Thanks
    lizeratsi
    But if you spread your capital over (i) paying down your mortgage, (ii) building your extension (or moving house), (iii) high interest current accounts and regular savers, and (iv) equity investments within pensions and S&S ISAs, wouldn't you feel that your money is much more diversified and therefore more secure than if it were all invested in one distant building?

    In your shoes I'd pay particular heed to The Nice Englishman.
    Originally posted by kidmugsy




    YES Perhaps...however I am really struggling to understand how investments work, this is like chinese to me. We all have areas where we find understanding easier but I have a real mental block on the investment side of things. I am trying to learn because if i sell the flat I am hoping to start a sipp and put money into stock and shares ISA.

    Non of this is anything I have had to consider before and I am worried about making mistakes. I totally agree with the self sabotage side of things.
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