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    • Frames84
    • By Frames84 12th Jul 18, 11:07 AM
    • 7Posts
    • 2Thanks
    Frames84
    Inherited half a house rent/sell/etc
    • #1
    • 12th Jul 18, 11:07 AM
    Inherited half a house rent/sell/etc 12th Jul 18 at 11:07 AM
    Hi,

    My father passed away at the turn of the year and my sister and I are finally ready to start sorting the estate out. Looking at it there is a property worth about 100k and cash assets of 120k. We're going to seek financial advice but I was hoping if anyone one here as been throught he same situation or any general advise. No inheritance tax is liable with the estate total value 220k-ish

    My personal situation, I live with my partner and 2 young children (1 and 7) in the north west UK, no debt, work freelance but never struggle for work some savings which would last me 3 - 6 months if the world fell in. I have a mortgage of about 110k which is a replayment mortgage for another 23 years and I'm in my mid 30's.

    So my sister and I could sell the property and I could clear my mortgage.

    I could invest my share/ pay down my mortgage of the 60k and we could rent the property out. The property would rent for about 550 a month - 6600 per year. I'm awful at DIY and don't have time so would likely get someone to run it for me. A good year would be around 2500 each which would be taxable, leaving a 1200 for insurances/ fixes/ maintenance etc.

    No experence of being a landlord so I guess I need to look at what entails.

    I feel very fortunate that my dad has left us this so just hoping for anyone with any relative situation or areas I may not have looked at.

    Thanks
    Frames
Page 1
    • foxy-stoat
    • By foxy-stoat 12th Jul 18, 11:20 AM
    • 3,023 Posts
    • 1,697 Thanks
    foxy-stoat
    • #2
    • 12th Jul 18, 11:20 AM
    • #2
    • 12th Jul 18, 11:20 AM
    Sell and clear your mortgage - put some money into savings accounts for your children, they will need as much as they can to get on the ladder in years to come.

    Buy a nicer car and have a holiday.

    Sorry for your loss as well.
    • Mojisola
    • By Mojisola 12th Jul 18, 11:24 AM
    • 30,037 Posts
    • 77,158 Thanks
    Mojisola
    • #3
    • 12th Jul 18, 11:24 AM
    • #3
    • 12th Jul 18, 11:24 AM
    Renting out a property that you have an emotional attachment to can be difficult. How would you feel if tenants didn't look after what had been your father's home?

    Before you inherited this house, did you have an interest in becoming a landlord?
    • lisyloo
    • By lisyloo 12th Jul 18, 11:46 AM
    • 22,726 Posts
    • 11,297 Thanks
    lisyloo
    • #4
    • 12th Jul 18, 11:46 AM
    • #4
    • 12th Jul 18, 11:46 AM
    Being a landlord is a significant job.
    You have responsibilities for people's lives literally.
    You have to do things such as gas safety certificates (not done can be fatal), comply with money laudering regulations and make sure you don't let to someone without the right to be in the country.
    You will need to do maintenance and repairs, sometimes this may be at short notice e.g. if there is a leak or no hot water.
    Tenants may be difficult e.g. call you at 4a.m. they could cause damage.
    Of course that is the downside and usually the worst doesn't happen.


    In order to make the best decisions financially you'll need to research how to hold the property (singly, jointly, in the name of a non-taxpayer, or a ltd company). Pay the correct amount of income tax or CGT.


    It can work out well, but you should not be under any illusion that this is a hobby.


    Personally I never wanted to be a landlord and wouldn't have wanted to put the time in on top of a full-time job.
    People that did have done well, but you have to be prepared to do the work.


    You should also not expect tenant to treat the place with the love and care that they would with their own home e.g. wear and tear will be greater.
    In between tenants you'll need to maintenance perhaps more that you'd put up with in your own home (or lower the rent if it's a bit tatty).
    • xylophone
    • By xylophone 12th Jul 18, 11:51 AM
    • 27,281 Posts
    • 16,316 Thanks
    xylophone
    • #5
    • 12th Jul 18, 11:51 AM
    • #5
    • 12th Jul 18, 11:51 AM
    Does your sister want to be a landlord? Do you?

    If you sold the property, you could clear your mortgage and invest what would have been your monthly mortgage payment into a stocks and shares ISA/your pension/ JISAs for your children etc.

    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

    http://monevator.com/using-vanguard-lifestrategy-funds-life/
    • AnotherJoe
    • By AnotherJoe 12th Jul 18, 11:59 AM
    • 11,451 Posts
    • 13,219 Thanks
    AnotherJoe
    • #6
    • 12th Jul 18, 11:59 AM
    • #6
    • 12th Jul 18, 11:59 AM
    Similar comments to everyone else, I'd say pay off half your mortgage*, pay more into a pension, put some away in investments/savings, have a nice holiday or two. And dont get into the landlord business unless its always been your ambition.




    * because mortgages are cheap at the moment and putting money into a pension will be much better financially and pay off what seems like a long time away but doesn't in retrospect when its time to retire !
    • Cakeguts
    • By Cakeguts 12th Jul 18, 12:23 PM
    • 5,219 Posts
    • 7,909 Thanks
    Cakeguts
    • #7
    • 12th Jul 18, 12:23 PM
    • #7
    • 12th Jul 18, 12:23 PM
    One of our ex tenants called the emergency letting agents phone line on Christmas Day to report that their kitchen sink was blocked and could they have a plumber to fix the problem. The tenant had caused the blockage by pouring fat down the sink. This is the kind of rubbish that you have to expect as a landlord.
    • Frames84
    • By Frames84 12th Jul 18, 1:58 PM
    • 7 Posts
    • 2 Thanks
    Frames84
    • #8
    • 12th Jul 18, 1:58 PM
    • #8
    • 12th Jul 18, 1:58 PM
    Hey all!

    Thanks for the replies, some good comments and I am leaning towards selling and trying to clear my mortgage. We're down to speak to a FA so I'll see what they say.

    Thanks
    • Sea Shell
    • By Sea Shell 12th Jul 18, 2:11 PM
    • 1,011 Posts
    • 1,607 Thanks
    Sea Shell
    • #9
    • 12th Jul 18, 2:11 PM
    • #9
    • 12th Jul 18, 2:11 PM
    Another vote here for sell.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Margot123
    • By Margot123 12th Jul 18, 3:15 PM
    • 1,089 Posts
    • 1,123 Thanks
    Margot123
    One of our ex tenants called the emergency letting agents phone line on Christmas Day to report that their kitchen sink was blocked and could they have a plumber to fix the problem. The tenant had caused the blockage by pouring fat down the sink. This is the kind of rubbish that you have to expect as a landlord.
    Originally posted by Cakeguts
    Can relate to that!
    My tenant demanded everything under the sun including a carpenter to fix a squeaky toilet seat. He also wanted lead replacing from a bay window as it was 'making the property uninhabitable'; turned out that he had stolen it (proven via Smartwater)!!!!!
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