Wwyd - inherited money/property

[Hamsternautss]

No idea what the best way forward is in our situation so just looking for thoughts. I've never had "spare money" so wondering how to make the best of what I've sadly inherited from my lovely dad.

Our current situation;

We own 25% of a shared ownership 3 bed house outright with no mortgage on our share (105k equity of 420k) and live in Surrey. We pay £700 a month for rent/service charge. Moved in this January. Need to live in this location due to partners job. No debts.

dH earns around £40kpa. I have been out of work for 7yrs with 3 children, aged 7 to 2 years
old. I will start looking for part time work when my youngest starts reception in 2024 or maybe when they start nursery next year if I can get something to suit school runs/holidays etc. Our budget is very tight until I go back to work.

My dad who lives about 120 miles away suddenly passed away this April. I'm his only child and have inherited around 100k in cash and have just had probate approved. I now have to decide what to do with his house.

His house is worth probably around £150k if it was in good condition. It needs central heating installing and requires a full refurbish including new bathroom and kitchen. In current condition a "we buy any house" type firm reckon they'd pay around 120k in its current state. It would rent out for approx £700 per month if we kept it and did it up ourselves, I'm aware being a land lord doesn't always makes money at this scale and can often end up costing if the tenant doesn't pay etc.

I'm just not sure what the smartest thing financially to do would be regarding my dad's property.

I've heard just having money in your account now is essentially just a waste and will decrease in terms of value as everything is increasing still.

We don't really want to buy the full ownership in our shared ownership house and would prefer to eventually move.

If we sold my dad's house now we could eventually do this and move again in two or three years. But until then the money would just be sat in my bank account not doing much.

The thought of spending his money doing his house up to rent makes me nervous especially if it doesn't wash its own face. We aren't doing the amazingly financially (no debts but can't save much till I work) so would be a lot of money to lose. However if it washed its own face in terms of council tax etc it would be a comfort to me to still have his house rather than every last thing of him being completely gone.

Is there something else I should be considering or that im missing? I know we need to get out of shared ownership asap to save the money spent in rent (it was our only option), I've never been very good with money other than saving it. If you were in this situation what would you be thinking of doing?

id sell the house

i should add id sell the house as it is, let someone else take on the refurb of it whether it be an investor or someone buying it to live in

i also inherited a house that im about to sell, i wont live in it and cant be arsed with the idea of being a landlord and rather sell now and clear my mortgage

Sell the house.

I'd stick at least half that cash into a pension.

In this market I’d try and get a quick sale and then invest that money back into another property and lease it out. The housing market is only climbing and with living costs spiralling it’s the safest and best place you can keep your money.

So sorry for your loss OP. I don't know what you should be doing with the money but I'd say think very carefully before you rent. Can you cope with not only the tenant not paying, but the ongoing cost of maintenance & repairs? Keeping on top of legal checks? The rising tax implications on rental properties? Self assessment yearly? Monitoring changes to renting laws that may impact your ability to take your house back should you want to sell? On top of all that, you sound emotionally invested, so how would you cope if you ended up with a tenant that caused damage to your property?
If you can hand on heart say all that would be a breeze then renting it might be for you. If not then hopefully someone wiser than me will come along & advise how best to make your money work for you.

I would sell the house. You are too far away from it to oversee the work yourself and it will just become a burden. With the house sale money, cash and equity in your current property, could you not buy somewhere outright and be mortgage free?

Sorry for your loss. I lost my dad suddenly and found inheritance really hard, felt like such a huge responsibility that I wasn’t expecting or ready for.

We bought a bigger house with some of the money. You’ve essentially got £350k across your assets, you’re in a particularly expensive part of the UK, but still seems reasonable that with a mortgage costing less than your current rent you could get a decent house, the advantage of paying mortgage instead of rent is obviously a better position to be in.

I have some money in the bank, inflation will eat into it but we’re covered for most emergencies.

I have some put away for kids university fund, but good chance they will get minimal loans due to our income.

We used some money to take the kids to WDW, it was a trip my dad had intended to take with us. We had the best time.

Ive put some in S&S ISA which has lost value, but I’m intending to keep invested for 5-10 years and believe it will make a decent return in that time, then I’ll use it to pay off another chunk of our mortgage.

DH has also increased pension contributions (priority to his pension as he pays higher rate tax). Pensions probably are the safest return on your money but you’re tying up money until at least 55.

Would it not make sense to sell the house and put the money into your house, buying a bigger share. I know you say you don't want to, but you don't say why?

As you say, money in the bank will be worth less in the future, but if it's bought a bigger % of your current house the value of the % you own will have increased if house prices continue to rise. Then when you sell you can not put all of it back into the next house if you don't want to.

It would also presumably lower your monthly rent, which would help your budget?

I'd not consider doing it up if the only difference between the sale value and the done up value is 30k. Have you had local estate agents round to value? I'd expect them to be able to get you more than a we buy any house type company.

Could you not just smarten his house up, do any repairs that are cosmetic, redecorate, tidy the garden & paint any of the outside that needs it, just something simple like this may put £10k on the value & make it more attractive to buyers.

Sell the house through an estate agent. You won't get the money from a refurb back, and renting is a risk you can't afford. Increase the ownership of your house then you will benefit from house price increases and reduced rent on the rest. Stick some in Premium bonds for easy access if you need it quickly, mine do pretty well in terms of increase and they are safe

Hi op,

I would also sell but definitely make it as attractive as you can! Clear rubbish out etc.
Don't go wild spending money but it can still make a little more with some love.
Whatever you do, if you have no savings for your DC, put at least 1,00 each into a stocks and shares ISA for them.
Choose an index fund, basically buy the whole index, it's really low at the moment! The markets move in cycles and right now it's on sale. Look up vanguard and Jack Bogle.

If you don't have your own ISA also do the Same.
Stocks and shares don't even bother with high street bank's interest rates! Opening these things up isnthe biggest barrier... people procrastination.
So just do it. Put a few grand in for yourself.

Next open up sipps for you and the DC. Self invested personal pension.
Again but an index funds or something like vanguard life strategy.
Go for 100 equity, you will buy a little of everything globally with this fund.

Same for DC... obviously but a little more in for yourself.
Don't go mad choosing a platform, get it open and move it to another platform when you feel comfortable with it all.

Then emergency money.

Then have a little in premium bond's.

Once you have cloaked yourself in this sheild,then sort out houses.
But I'd say it's imperative you open up an ISA for yourself, stocks and shares.
And if you have money right now it's a great time to buy.

Whilst waiting for the rest to see what3to do you can put 50 grand I think into premium bonds? It's safe in that it won't decrease and people sometimes get wins...

Is your rent tied to RPI or CPI? It may go up extremely quickly due to inflation so just be aware.

I’m so sorry for your loss.

i’d avoid the we buy any house brigade. I’d be inclined to spend some of the cash and do the house up just enough so that it can get a good sale/mass appeal type things. See what the rental market is like once it is done? As you say you want to move in two years so holding on to the property is good. Also check what the maximum amount is per bank if the bank goes and put your £100k (cash) into different banks not just accounts.

I’d sell his house - it could be really costly to do up to a standard for rental.
You could pay more in to own at least half of your shared ownership house and then you’d have spare cash to enable you to be a little more comfortable now with rising prices and to move when you’re ready.

In your situation I did up the house. But my children are older, I had a part time job and the renovation (stripped back to brick) cost far more than the estimate. We have it rented now but the rent will take ten years (not counting tax And maintenance) to cover the cost of the renovation but for us this is worth it because we intend to retire in this house (and sell our family home).

I really wouldn't have done the renovation except for the long term plan. And we had already built and renovate houses so bad some contacts and experience.

In your situation I would sell the house. Get advice on how to invest your cash.

Sorry! 20 years to cover the renovation costs....not ten! And it cost DOUBLE the original estimate even though we ended up doing a lot of the work ourselves

Get proper advice from 3 estate agents re value of house. "We buy any house" firms are fine for houses that are difficult to sell. Your Dads house sounds like a doer upper. Bet you would be surprised what you could get for it.

We buy any house types offer you a low price so when they sell at market value they are making something. Get reputable estate agents out for a full idea on what the house is worth.

With the rules and regulations on rentals including EPC changes now, I'd not rent. It definitely sell.

So the question is you’ll have £220k to £250k once the house is sold.

With this, I would firstly purchase your home off the shared ownership scheme if possible by increasing your equity and buying out the shared ownership interest by getting a full mortgage.

Beyond that, £15k in each child’s JISA and the rest on improving your life experiences.

Sorry for your loss.

I'd guess that the best thing to do would be to sell the house but why don't you speak to some local estate agents and see what they think. It may or may not be worth doing up up the house. Some places it won't make much difference and others it will.

I’m in a similar position - I’ve sold the money pit house 3 hours away and intend to probably put the money in a bond / limited access account for 12 months to get some interest … I’ll buy a property later nearer to me and rent it out .. I’m keeping an eye on the market / auctions etc

I would tidy up the house, make sure it's clean and presentable and get it on the market asap with an estate agent local to your dad.

I think you'd be surprised what you'd get for a doer upper. I wouldn't bother with webuyanyhouse types, you're not in a desperate rush to sell. It's summer so you don't need to worry about pipes bursting or heating not working.

Get someone in to cut the garden back if it needs it, and some cleaners to spruce it up.

I'm sorry you lost your dad OP.

I suppose it does depend on where abouts in the country the house is, but doer-uppers sell in a flash round here.

Agree with others, get several estate agents to value it, and sell it that way. Far less hassle and you can then invest the money in a fixed term savings account or buy premium bonds with it like a pp suggests.

I think people saying hokd into it but don't do anything are also making see sense in fhst whilst you decide what to do fhe house sont loose money like cash will.
Don't rush.

Just quickly, please make sure Dads house is insured correctly as an unoccupied property.