Renting parents house out - in best interests?

Unless it’s a large property, in a good area, in very good condition, I honestly wouldn’t bother. By the time you’ve deducted agents’ fees, all the maintenance/insurance costs, and any income tax payable, the income is probably unlikely to make much of a dent in the typical monthly care home fees.

And that’s without any hassle from difficult tenants/tenants who don’t pay, etc.

However, only you will know all the figures and will be able to tell whether the sums add up.

Should add that as a family, we’ve had this dilemma twice - good houses in nice areas, and perfectly liveable, but both needing expensive updating (redecoration, kitchens, bathrooms, carpets, etc.) which none of us had the time or energy to organise, so both houses were sold.

We did it as the older person just needed someone else to pay the council tax for the property, the income from pensions covered the care fees. All very straightforward and no CGT to pay afterwards as the property hadn't increased in value.

Keep in mind that even if you get an agent you need to have a really good knowledge of the legal responsibilities of a LL.

I'm currently helping the relative of a friend sort the mess she's been left in by an agent who was appallingly shit. She paid a very large amount of money to someone she thought would be professional and sort everything - she's now got a non-paying tenant that she currently can't evict as the agent missed the gas safety cert and then has issued incorrect notice twice.

Just another thing to add to the list. If you do keep the home and rent it out then you will be liable for Capital Gains Tax (CGT) on any increase in value.

Although there is a 9 month exemption. What this means is that CGT is ignored for the first 9 months after your parents move out of the property but, after that, any increase in value of the home will be subject to CGT.

I would strongly advise you to speak to a professional in this area

I would only consider it if it was through a council or HA scheme whereby the rent was guaranteed and they deal with the tenants.

If you get good tenants in good circumstances who pay their rent it's great. However, the costs of evicting a tenant now are so high it can easily wipe out a years profit instantly (sometimes will cost even more than that).

For me a as a LL the risk of that is worth it as I have no mortgage on my rental so if it doesn't make a profit in one year it's not a disaster as that money isn't earmarked for care fees.

I recently sold the house of a family member after they went into a care home. A sibling was keen to look at renting (“income plus we keep the asset!”) but for a wide variety of reasons I thought it was a very bad idea. We sold the house and invested the cash and use the income from that and pensions (plus principal as needed) to fund the home.

If you want to pursue I would think carefully through all the costs. Costs of getting things up to scratch to rent, agent costs, maintenance costs, void periods, tax in the income. What if the renter doesn’t pay and it takes a year to evict? Have you done this before, can you do repairs to a high standard or do you have contacts. Etc etc.

I would also consider, and I’m sorry to be morbid, the life expectancy of the owner. If realistically they may live a year or two you will likely need to sell for probate anyway.

Have you ever been a landlord before?

How will repairs and general up keep be managed?

Whats the expected timeframe 2 years or 20 years?

NB how many other family mambers are there and how much support is being offered for the idea?

Is it financially viable? We found the rental income was less than a quarter of the monthly fees so unless there is also a pot of money in the bank it’s going to be hard to manage. It’s costly upfront too getting everything in order and if anything goes wrong you need to have the backup funds too.