what on earth to do with inheritence?

[marymaryquitecontraryusedtobeafairy]

I've been left a house which to sell now would bring me about 80K in the bank.

I'm poor. I bring in about 24K/year, and am in masses of debt. I just survive. I'm a mum and I work and get benefit top ups. I'm council housed in a dire part of the country, the house is in a slightly better area but I don't wish to uproot myself and children from school and home.

What do I do? Can this help me get out of the poverty trap? Do I live off the money? Live in the house and enjoy a secure home but remain in poverty? I can't afford to do the house up but can I possibly buy a very cheap or auction place, do that up and start flipping houses as my main income?

Look I'm not that bright but I've worked hard all my life and it's just not good enough financially. I decided to be a care worker because I enjoy it but the pay alongside the increase in prices has crippled me and there's no way to get out of it so I just trudge on day by day. I'm not miserable nor are my children but I don't want to waste this opportunity.

I don't have money for a financial advisor right now nor time to research so I'm hoping you clever and wealthy lot can help me out a bit with pointing me in the right direction.

Thank you.

@Monkeylimas
No, it's owned outright and structurally sound but things like broken patio door, really naff and old aunt twacky décor, but perfectly liveable so I'm thinking about using it as a student or just shared housing which could bring in 12,00/month then I keep working, bring in another 1,200, no benefits…. So I have a property, cheap rent, and 2,400 a month which is a pretty good income and I would need to save in order to do repairs and things.

But I could also just buy my house or start my mortgage on it and use the money to do it up with a view to maybe selling up when older and moving into a little bungalow.

that house is worth around 110K according to Zoopla. Mine is worth around 90K according to the same.

⬆️

Rent it out and move there when the kids are older.

There was a thread a few days ago where someone was struggling as they had been offered a cleaning job when they wanted retail work. SOmeone on there recommended a number of free online computing training courses - if you have admin experience perhaps you could boost your tech skills with some free training in web design (so you could offer to maintain/update websites) and data bases which would enhance your employability (and therefore pay) in an admin role? Or perhaps look for remote secretarial work to do in the extra hours freed up by childcare. Apparently there are grants for buying the equipment needed.

As far as the house is concerned I would have thought it might make sense to move in to it. Although it won't make a difference to your finances from a rent point of view, being a homeowner should make a huge difference to the type of loan you can get to consolidate your debts (as you have an asset to secure it on) and it should then be much easier to pay that off. If you really don't want to move I'd look to buying your current house.

Eligibility checker for Right to Buy is online -

Find out if you're eligible for Right to Buy - Own Your Home - Own Your Home

Good luck OP !

IF OP is thinking of hanging onto the house, she will also need to find out when she will be required to start paying Council Tax on the house as an absent home owner. Will she keep the electric, gas and water on? How much will that cost in standing charges? An empty house can deteriorate rapidly due to damp, inadequate heating, late detected water leaks. Also vulnerable to vandalism and squatters. She will at least need to take out buildings insurance. If no-one is living on the premises, this may cost more as it may need a non standard policy as no-one is on the premises.

If thinking of becoming a landlord...
(Redbridge Council, but some of the information is generic.)

https://www.sandradavidson.com/who-pays-council-tax-tenant-or-landlord/

When Is The Landlord Responsible For Council Tax?

As a landlord, it is essential to understand your responsibilities for paying council tax to avoid a court summons if the council tax bill is not paid. There are occasions when the person who owns the property has to pay the bill.

When individuals rent rooms in a shared tenancy and occupy only part of the property, which we refer to as a House of Multiple Occupation (HMO), the landlord will pay the council tax bill but divide it by how many rooms there are and increase the rent by this sum.

Who Pays Council Tax On Rented Property?

• Landlords of Houses of Multiple Occupations (HMOs) should add the cost of the council tax bill to the room rental price.

• As a landlord, you (or your letting agent) must let the council know every time the tenancy in your buy-to-let property changes (this doesn’t apply to HMO room rentals since the council tax is a landlord’s responsibility).

Let me be blunt - you have no idea what is involved in running a HMO. There is a lot of legislation. You would be a fool todo that. There is considerably less legislation over lodgers and you can evict them easily and fairly quickly if they dont suit.

I dont have experience with debt management plans. If you do have to sell the house and cant move into it then definitely rtb is the way to go. Once you've paid off your debts a financial advisor should be able to get you a mortgage.

At least 50% of what you earn from renting it will go to tax man so that will be 600 per month. + all the types of landlord insurances is about another 100 per month. It’s honestly not worth renting out.

If the house is in a better area make the move now while the children are young. It will give them a better start in life. Don't worry about uprooting them. I moved 5 times as a kid. It is character building.
Keep the house. If you sell it and carry on renting you will slowly work through the money and have nothing to show for it in a few years. You will be stuck paying rent in a council house for the rest of your life. Surely you don't want that when you have been given a gone that you can say is yours.
You will have an asset that you can leave to your children. Don’t throw that away. If you really don’t want to move then consider renting it out.
You say you work in care. I don't know if moving means moving jobs but your skills will be very much in demand for agency work which pays better. You can pick and choose your hours in that.

Could you approach your council to see if they would be willing to pay you to vacate your council house so they could house a homeless or poorly housed family? It would need to be enough to pay off all your debts, do up the inherited house to ensure no big bills in the near future, e.g the boiler, rewiring, and a bit more to manage the move and tide you over until you find a job in the new area. Decades ago some friends of mine were paid to vacate flats in Docklands, before it was gentrified. They didn’t get much, but it helped them with a deposit to buy a house.

I'd avoid letting it out especially with multiple occupancy (totally different regulations)
I'd sell it, exercise right to buy, pay off debts and invest in training.

Good luck.

Zoopla house value estimates are inflated. Best to compare with similar local houses that are already on the market or have been recently sold.

Exactly. Many of the professional landlords are currently selling up because of all the new requirements (and expenditure) they are facing - and they have been doing it for years. Please do not consider this @marymaryquitecontraryusedtobeafairy .

If your council tenancy is a secure one I ou kd hang onto it. Sell the house, clear your debts, if there’s a lump sum left over then pay for training towards a better job. Local authority work would value your experience and provide better pay and perks. If you’re not averse to the idea of a house share you can legitimately take in a lodger if you have the room.

Location Location Location which one is in the best location?

See if you can get a small mortgage of 25k. Pay off the debts and use 5k to turn house into hmo?

I say avoid renting it out as a landlord of over 30 years.

I would have a go at renting it out as you as say OP.

I think giving it up all together is unfair on your kids as they’ll have no inheritance.

I’d try and rent it out with the plans to move into it in the future.

If you don’t get anyone wanting to move in then you can always move in it yourself.
You haven’t lost anything.

The rent you think you’ll get us quite high and so I would make sure what you’re asking for is realistic by looking at other similar properties in the area.

There’s no point selling it just to buy your council house if it’s better than your current home.

You definitely need to sort your debts out by going to a debt management company though.

There are some benefits you can still claim like child benefit, but I think most will stop if you have savings in your account. So yes, you're right - the remaining £60k will just dwindle until you're back where you started.

But... if you purchased a property with the money, I am quite sure most of the benefits will continue. So this might be worth looking into.

There's an online benefits calculator you could put the details into that will show you what you could claim if you own a house.

If you speak to a mortgage broker then they'll let you know if they include benefits. They certainly include child benefit!

Would £130k buy you much of a property? You can use a mortgage calculator to have a look at costs:

https://www.moneyhelper.org.uk/en/homes/buying-a-home/use-our-mortgage-calculator

Borrowing £75k would mean paying back around £490 a month. Is that cheaper than your rent?

HRTWT, do you realise you HAVE already lost your benefits (some?) the MOMENT you had control/ownership of a house with £80K. All that needs to happen is for you to go to the Council ASAP and declare this and the date this took effect so they can recalculate what benefits they are currently paying you since you took control of this £80K worth of property and recoup that whilst stopping others going forward.

The word is within a reasonable time and that's usually 2 to 3 months and no more. I have seen many people go to jail for failing to declare asset/savings/invest/income that has taken their wealth over £16K a year.

So, other than speaking to MN, your first point of call s who to see who pays your benefits to notify them.You can then make a proper decision knowing what you can afford (to move into this property or stay and live on this money until its gone and you are back on benefits again.)

Another poster asked you to ask the Council for RTB the property you live in, if that will leave you with a bit of money.

ps - I would NOT recommend become a landlord. The house would need to meet all the standards for a rental property, then you would need to make sure you have sufficient funds to cover any periods with no tenants, or tenants that stop paying rent. It's a HUGE commitment.

OP are you on a debt management plan or an IVA? this is really important. One is legal and the other is an informal agreement.
On a DMP you wont have to use the house to service debts. On an IVA you are legally required too

As a family we have a small portfolio of properties which we rent out for a good rent and as on all the mortgages are now paid off we just need to worry about rents and tenants affording bills.

We’ve decided to sell up if the sums don’t add up rents in the future.

This is going off on a totally different tangent but how about starting a business? A best friend of mine inherited 2 large sets of money, she wanted to come off benefits before this and did this, had a small business. She spent a lot of the first inheritance unwisely but the second lot she did a RTB on her council house and started a local small business. She’s had it now I think 3 years and though hard work (beauty salon) she appears to be making a living from this. She’s very good at this sales and promo side of things though.

@marymaryquitecontraryusedtobeafairy you are going to need specialist advice. Inheriting a property is going to impact any means tested benefits including housing benefit. CAB might be a good source of information.