Potentially life changing inheritance - wwyd?

[NotThatWise]

First time poster, apologies if I missed info or added too much detail.

I have recently inherited my childhood home, owned for 40 years, we are the only people to have ever owned it. House is mortgage free.

I’ll try and layout the facts, and I’m interested to know what other people would do in this situation. What would your future look like?

Childhood home value £350k
My home value £325k, £100k left on mortgage
Both houses are the same size in the same town.
DH (47) and I (43) plus 2 children (8 &12).

Personally I would sell one, pay the mortgage off then put most of the rest into pensions. Keep some for home improvement or a holiday! That’s assuming you’re happy with the size and area of the property you choose to keep.

I'm sorry for your loss, and that you have to make a big decision while you're still processing that.

Personally I'd either sell both and relocate or sell your parents' home and put the remainder (after paying your mortgage) into shares so you get an income from them.

What I wouldn't do is let out one of the houses. Being a landlord is fine when you get a good tenant and nothing breaks down / leaks/ gets storm damaged and horrific when you accidentally let a miserable pest of a person lease your property. I mean the sort of person who blocks your drains through stupidity all the time, and finds fault with absolutely everything so you have a revolving door of maintenance contractors going in and out (this was a house I'd lived in before moving abroad for work, so I knew it was in great condition - the previous tenant didn't want anything done & loved it). Honestly, it can send you mad from stress. Nobody needs that on top of grief.

Personally I’d rent out the house you inherited but gift the house to your children when they are old enough. You could use the rental income to pay off your mortgage. That way both you and the children benefit.

Capital Gains Tax! A second home.

Sell one and buy two flats to rent out, manage them yourself. It will be a fab income and you can then decide to hand one each over to the children when they are older, they can then decide what they would like to do with it, either keep as a rental or sell for a decent deposit for themselves.

Personally I wouldn't want to be a landlord so I'd definitely sell. Agree with the poster who said I wouldn't skip my inheritance for my children lol.. I'd want to benefit first and also, I feel like making my life easier means for a better life for my children too!!...
If you want a bigger/ better house..sell both for a mortgage free property of around 450,000 and keep the rest to save or enjoy YOLO... also, a bigger property will increase In value which you'll be leaving to your children eventually anyway.. plus you could always downsize when they get to the age of needing a house if you wanted to help them out with money. Think of all the money you save monthly from not paying a mortgage monthly

Isn't it obvious?

Live in the one you prefer and sell the other....

Keep the one you like the most sell the other one

Do some window shopping on Rightmove OP. Look at properties of around £500,000 to see if there are any you can imagine your family in.

You would have to pay capital gains tax if you sold it

So you will loose 20% or more of the sale price

If you want sensible advice then sell one and drip feed the cash into your pension and ISAs (drip feed to maximise your tax allowances).

Do not rent one house out, rental income is taxable and yields are generally lower than elsewhere. That’s before you get to expenses on maintenance.

Do not suddenly up your outgoings (more expensive cars / holidays, etc). You’ll spend the money and have nothing to show for it, other than experiences you’ll have forgotten about in a few years time. And worse, eventually the money will run out and you’ll be back where you started.

I sold the only family home I’d ever known after death of Ddad. It was a wrench but I knew it so well I can visit in my mind whenever I want. The memories are still mine.

If it was me I’d sell the inherited one and either buy a holiday home abroad or invest the money.

I couldn’t think of anything worse than moving into either my or my DH’s childhood home and I like my current house. Don’t become an accidental landlord. Been there, done that and it was a nightmare.

The last thing I'd do is rent one out. You don't need the headaches. I was a landlord for 20 years and I'm so glad to be out.

Rent out your childhood home for 2 years. Hell for leather to clear that £100k mortgage and be debt free.

Then you have 2 homes to leave for your children, or a retirement egg for you and DH

I don’t think selling your childhood home will ever be easy, but- if you can reconcile this with getting a family home that your children and yourselves really live and it’s like your ‘dream home’ then you can think of it as a stepping stone towards you getting your children that memory too.

it’s funny really houses literally are bricks and mortar and the home is everything inside including the feelings and you take that with you.

I like to think of the lovely big home I had with my ex and when our children were very young as a chapter, the story is ours but now the page has turned and someone else is writing their story in it - and as soon as your parents belongings are out of it - it will stop feeling as if it’s yours.

I don’t really have much practical advice other than to say grief is an extraordinary thing and it does take time but then in that time life does carry on .

Not quite the same, but when I met my husband we both owned our own 3 bed homes, albeit with small mortgages, which have subsequently been paid off.. He moved into mine, and we let his out. The rental income enabled me to stay at home with our daughter (who has SEN needs). We then re-mortgaged the rental home to buy a flat, which we also rent out. The two rentals are effectively our pension, whilst my daughter will have a substantial inheritance in years to come.

The inheritance is not enough to not work. Don’t think of giving up your job. Please don’t.

what I would do, as you say you’re squeezed into a 3 bed semi, is to sell both properties and move into a house that suits your needs in an area that works for your continue employment and where your children and both of you are happy to live

alternatively, sell one and rent out one house (patent’s) and mortgage it, using money to buy a home that meets your family requirements.

I’d also use some of the funds for one really great holiday. Then it is back to normal.

while £350 is a huge sum of money, it is not retirement early money. Do not change your lifestyle thinking it would last forever.

I inherited a small amount of money however I used it wisely and managed to leave Kent and move to North Lincolnshire. Best move I ever made. Wish I had done it sooner. I've got two children aged 12 & 13. Family happiness is so so important. Couldn't afford what we wanted but I'm so happy with what we have. Why not look at the houses and areas. Do weekend trips away and see what part of the country you fall in love with. That's what we did.

Rent one house out with rent to cover your mortgage.

Ahh lovey I'm so sorry. Thats very hard re your bereavment. Having grown up with and faced the bereavement of my dad alone I really do empathise. Sorry no advice re the houses but I would definitely recommend the bereavment counselling - I needed it and it really helped! Good luck and whatever decision I hope you have a lovely happy life 💕 and just to add - it'll be ok - youve faced the worst now.

Sell both houses, buy your dream house, and with what's left over invest in either a holiday home or a property to rent out.

@Fraudornot as the value of house is less than inheritance tax threshold there is no inheritance tax. you only pay capital gains on the difference in value from when you inherit (probate value) to when it sells so if valued at 350k for probate and you sell at 360k with legal fees and estate agents fees of £3000 you're gain is only 7000, capital gains is only paid on the gain, not the whole price

Read the bloody thread. Their own house is too small and the inherited house is the same size so the sensible thing to do is sell both and buy a bigger house that fits their requirements.