DC have inherited a flat! Sell or keep?

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A fabulous problem to have I know, but my two DC have unexpectedly inherited from a relative.

The property is a high rise flat in 60's style block on the edge of a busy city near very good transport links. It's an area they know well as it's not far from the family home. It has decent sized rooms and lovely views.

Dc are late teens/early twenties and just starting out in life. Both live away from home and have no plans to return.

There are three options:-

First is to keep it and rent it out so they can get some income from it. Neither have a property of their own. This is my least favourite option as I know I'll end up doing the practical stuff like getting a call at 3am from tenants to say the boiler is broken! We have no experience of letting, but I'm sure with all the rules and regulations it would be a nightmare.

Option two is to keep it and use it as a base for storing furniture and to use themselves when they come home for Christmas, etc. This has some appeal, but they'd have to think about paying service charges, council tax, etc.

Option three is to sell it.

It's very much their decision, but I would like your thoughts please as they're due here in a couple of days for the funeral (which I'm organising) and they want to discuss it.

There’s absolutely nothing wrong with using a few grand on holidays and splurges! Life is all about balance. I’d do the same and use some of the money to tick off a few things off my bucket list.

I would add to my Emergency Fund, invest a substantial amount in hope for an early retirement and get some home improvements done too, though.

Very unlikely they own the property - if it’s not be put in their names prior to relatives death, then they are at perfect liberty to not put it in their names and just sell

Sell and I say this as a landlord having just evicted an aggressive alcoholic tenant who has SS involvement with his poor dc, police round multiple times, hasn’t paid the water rates or TV licence the whole time or the 2 months’ rent after the Section 21. Fortunately, he did leave when told if anyone remembers me whinging at the time. Left the house in a disgusting state, clearly hadn’t toilet trained the puppy, there was dog faeces in the bedrooms and all the new last year carpets are ruined. Cans and cigarette butts everywhere, despite no smoking being part of the tenancy agreement. It’s a shame, the previous tenants were brilliant, despite frequent requests for stuff (our responsibility as ll, I know). I just don’t think it’s worth it and as you say, you’ll be made responsible. Get rid asap.

Who is the legal owner then if not the people who have inherited the property?

The deceased is the legal owner, represented by the executor of the estate as their personal representative.

Maybe not, with the cabinet and senior Labour players.

Jas Athwal, elected to Parliament in last month’s general election from Ilford South constituency in east London, said he was “shocked” and “profoundly sorry” to hear of residents’ issues after the BBC reported on mould and ant infestations on Friday.

Athwal, 60, is said to own 15 rental flats and says he had not been aware of the issues due to the properties being managed by an agency. He has now promised that repairs and maintenance will be completed through immediate action.

Shame his action is remedial.

Only a very small minority of MP's of any party only own the family home. The majority have second homes or holiday lets or buy-to-lets. Often in spouses name. Or a trust. Or in MIL's company. The majority do not invest in risk businesses because their understanding of how real markets work - real markets that generate wealth - is shamefully negligent.

Chipping Norton Cameron. Bristol Blair. Second home Rayner. All fucking self-interested liars.

Jas Athwal is a lying cunt. He does not speak for any young person trying to buy a home.

He must resign.

Sell, put in the LISA or pop into premium bonds, it’s a significant leg up when trying to get on the property ladder. Renting property comes with expense and hassle.

I would sell or rent. My preference would be rent and bank the income, so you have a float of money if needed for repairs etc and then sell once DC are ready to buy their own homes. I would do this properly through a solicitors/estate agency and accountant. If I sold it I would put the money in a high interest account or Lisa, Isa, etc. Sorting the estate out can take up to a year so time to look into housing and rental markets as well as high interest accounts and weigh up your options.

Selling does sounds the best option, but it can be good financially to keep. My DC inherited a property when in their late teens. They had it put in their name and paid the service charge but left it empty as they could not decide what to do. The Council would only rent it from them if it was in better condition.
After a year or so one of my DS moved into the flat and is still there. The flat is now worth around four times its value at the time of inheritance.

Either rent or sell don't keep it unoccupied or you will have to pay council tax insurance etc.
Rent .You will need a contingency fund for if anything goes wrong and landlord insurance etc. It's an idea to let an agent take care of everything.A lot of estate agents will do it for a fee and take a bond. Then they will get an income and hopefully the flat will increase in value.
If they feel it's too much hassle sell and invest the money in a bond.

Don’t be daft 😂

As it looks like its being sold, then if wont affect the first time buyer status of the beneficiaries - the executor has to sell it and the money paid out to them. Dont transfer the property into their names with the Land Registry first! This will have implications when they eventually want to buy their own homers.

Sell. My two siblings and I inherited my late mother’s flat earlier this year. We briefly discussed keeping it and becoming landlords but came to our senses and sold it. None of us wanted the responsibility of dealing with (possibly horrendous) tenants.

Oh for goodness sake. Discussing it is not going to change the situation is it.

If it’s in a high rise block I would seek advice from an estate agent. Flats in high rises are much harder to sell following Grenfell. Lenders and surveyors are more cautious. Hopefully the block should have been registered with the Building Safety Regulator now and any potential safety issues identified. Although there are some protections for flat owners in terms of being recharged via the service charge for any remedial works which are found to be necessary, these are not watertight, and you could find they have a hefty service charge to pay in the future.
For these reasons, if they can sell (as in, if an estate agent thinks there is a market for these flats), I would sell.

Storage?

While I'm a big fan of LISA's (we've helped both our DC set up ones) you possibly need to be slightly careful as they are supposed to help young people buy their first property - technically would this be their first property? (Idk - I'm just asking the question). In answer to your question I would say sell - otherwise it could be an ongoing problem for years to come.

I agree with this.
Assuming it's a viable rental it makes more sense to rent it out (via an agent), so it covers its own costs and provides some income for now. Your DC will be able to sell at a time that suits their needs and won't be tempted to to 'dip in' to the proceeds now and potentially end up with nothing left when they want to buy their own properties.
I'm not sure where the flat is located (other than near a city) but in the SE rental places are in high demand but very few buyers.

@saraclara, so you are making a gross profit of £500 a month? That's nothing to be sneezed at. In a year you'll have more or less made the £5k needed for the work on the flat.

And what if the repairs need doing now? A boiler can't wait for a year.

I'm surprised by all the sell comments. I'd 100% keep and rent it out. There often isn't that much management to be done on a rental and it can be outsourced if need be.

I would keep a big chuck of the rental income for any repairs needed and not assume it's to be spent. Then you get the added bonus of a lump-sum of cash a few years down the line.

Not sure where the property is located but won't it just keep going up in value far more than any interested you could accrue from selling and saving the cash?

We have 2 (accidental) rentals and one we haven't had to touch in years, the other has been a bit more of a pain in terms of repairs needed but the rent far out weights the expense - this will obviously depend on how much rent you'd be able to charge. We manage them ourselves (my husband and I) but we are relatively local (about an hour away from each).

Just something to think about. If the flat deeds are transferred in to their names, do they lose any potential first time buyers benefit going forward?

perhaps speak to the person administering the will to see what is the situation. They may be able to handle the sale as part of the estate so your children get the proceeds of sale but their names never registered as owners of the property thus protecting first time buyers benefits

Sell, it will deteriorate if left empty, could get burgled, vandalised or get squatters, almost as much of a hassle as letting but without the income.

I think it might make more sense for the estate to sell it and give each child 50% of the value. Then they will both be Ftb when they do come to buy. I’d definitely be advising that they stick money in a first time buyer Isa / saving it for a deposit rather than going wild with
it.

Sell, invest the proceeds wisely, and plead with them not to be tempted to blow it. Eventually they will almost certainly be very glad of a healthy nest egg to put towards a home of their own.