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.

They’re a service offered by WHICH legal services. It’s really cheap and you could give them a call. I think you need proper advice about how having inheritance would affect your RTB rights etc. I don’t see how it would matter as if you were given 80k cash and used that to buy your council house what difference would it make? But speak to an expert.

I don't think it would matter either - I mean, you could be a will beneficiary and given £80K, or you could win money, a lottery win or something - as long as it's not an ill-gotten gain, I don't see why it shouldn't be used to purchase your council house. They would just need to see proof that any wealth you've recently obtained is all above board and not the proceeds of something dodgy.

@Ourladycheesusedatum is right actually I've just looked this up now please ignore me!!

I'm not sure it would count as deprivation of assets if she is buying the council house she is currently living in and not claiming housing benefit as a result. She would get a big discount on it if she has been living in it for a few years too.

Just don't fall victim to horrible vulture family members like I did

Op I feel for you.. such a huge decision.
If it were me I'd be inclined to think that the money would be a better help to me, you have a home and are settled, repair costs are met by the council.
A prority for me would be clearing debt and starting a fresh with a good bit of cash remaining for fun and those rainy days.
Life is for living with money in the bank you can do just that.
Good luck with whichever path you choose.

She can't really keep a 'good bit of cash for rainy days' it will affect her benefits, ie she'd be expected to live off it, so she either needs to.
Invest it in housing or use it to invest in her education.

Personally I think investing in housing either by buying her council house or moving into the house is the best move.

Then looking at what training opportunities there are for her to improve her earning potential.

I think renting out the property is the way to go, maybe not this year though unless it’s OK to live in now. A PO advised you can get help with boiler replacement and maybe you can save a little over the next six months - I appreciate it will be tough - to build up a rainy day fund in case anything goes wrong after the tenants move in. Obviously get a letting agents to deal with the admin side of things.

You say in your last post you’re thinking of selling your inherited house to buy your current one. But because the house you own now is in a better area that house will likely increase in value more and will probably sell more quickly (if you need to sell it down the line) than the property you’re in now.

DO NOT SELL THE INHERITED HOUSE!

I agree that on looking at other roles that pay more in care work. A PP says they know someone who earns £700 a week doing sleep in care work. Likewise I know someone who earns £500 a week for working 37.5 hours and sleeping at the home 3 x a week - not bad going for a job where you need only minimal qualifications.

@benfoldsfivefan OP has children so sleep in work sounds like it won't be ideal. OP could do weekend work with the NHS though/ different agencies pay more sometimes.

I think renting out the property is the way to go, maybe not this year though unless it’s OK to live in now. A PO advised you can get help with boiler replacement and maybe you can save a little over the next six months - I appreciate it will be tough - to build up a rainy day fund in case anything goes wrong after the tenants move in. Obviously get a letting agents to deal with the admin side of things.

Where is the money going to come from to prepare a three bedroomed house for renting out? Why do you think landlords are selling their buy-to-let properties in droves? There is a lot more to preparing a house for renting out than getting help with boiler replacement and are you sure landlords are eligible for grants?

Do you realise that if the house sits empty for a year or so, at some point, the OP will be obliged to start paying council tax on the empty property; she'll need buildings insurance for the empty house (which is more expensive than insurance on an inhabited house); she'll need to pay standing charges on electricity and probably water, she'll need to travel to oversee the work being done on the house and to arrange inspections; she may need to pay for tradesmen.

It doesn't sound to me as though the OP has the wherewithal to set herself up in this economic climate as a landlord when she has no experience of having done it before, whether she uses a letting agent or not.

As far as I can see from her replies, the OP has yet to clarify whether the executors have already wound up the estate and arranged with the land registry for the deeds to be transferred to her name - so she is already the legal owner of the property or whether the estate is still in the process of being wound up.

Is the tide turning on buy to let, do you think? When landlords do sell up, who do the properties go to? Would be great if they were bought by housing associations or young couples. I've found the rush to enrich by gobbling up starter homes very distasteful. If landlords are now finding it difficult with enhanced regulation I think they're getting their comeuppance, frankly.

I agree with previous poster to think very carefully about becoming a LL. Have the posters suggesting this got any experience of being one? What happens if the tenant trashes the place and has to be taken through the courts to be evicted and then the place needs sorting out before it can be let again? This all cost us over 9k with one tenant....where does this money come from?

https://www.ownyourhome.gov.uk/scheme/right-to-buy/faqs/

https://www.ownyourhome.gov.uk/scheme/right-to-buy/eligibility/

https://www.gov.uk/government/publications/your-right-to-buy-your-home-a-guide--2

PDF:

gemstoneju - dont want to highjack this thread.....but i really dont see the difference between us as a LL and a housing association. In fact there are some awful instances in the news about HA letting slum type properties.

PDF: 2023 Your Right to Buy Your Home:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1160177/Your_Right_to_Buy_Your_Home_A_Guide_-_2023.pdf

When landlords do sell up, who do the properties go to? Would be great if they were bought by housing associations or young couples.

I can only speak for where I live. I live in a large South of England village with good local schools where properties range from £134,000 for small flats to £500,000+ for a 3 or 4 bedroomed detached houses. Over the last couple of years, a number of semi-detached and detached family sized properties known to have been rented out in the past have been evacuated of tenants and put up for sale on the open market. In this area, properties are too expensive for purchasing by Housing Associations but there are Housing Association houses being built on new estates in the village, alongside shared ownership, under the affordable homes Act.

Currently there is a modern, unfurnished three bedroom mid terrace to rent at £1450 pcm and a three bed semi to rent at £1395 pcm. The second of these was put on the market a few weeks ago at £315,000 but failed to sell quickly and is now being offered to rent again.

Can landlords take out insurance against those who default on the rent and for damage to the property - or is it just too expensive?

If you own and rent out a property how will you get help with a boiler replacement?
We paid for ours

There’s a national shortage of homes to rent, and as I said, I realise it’s not practical to rent it out now but in maybe six months during which time she could save or get a better paid job to pay for any repairs or refurbishment, now or in the future. Let’s face it, it doesn’t have to be a palace, especially if she rents to students. Taking on more debt is another route, probably nobody would agree with me on this as she’s already got £20K debt, but it would eventually pay off as it were if she could keep the house as a buy to let property.

Why do you think landlords are selling their buy-to-let properties in droves?

From what I’ve read in newspapers the biggest reason is piss all profits because of increased interest on their mortgage repayments, which of course doesn’t apply to OP.

According to this guide:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1160177/Your_Right_to_Buy_Your_Home_A_Guide_-_2023.pdf

existing debts could affect eligibility for Right to Buy.

But if in order to buy her current home the inherited property would first need to be sold, then I assume the OPs existing debts could be cleared before applying for RTB.

No guarantee of course that the inherited house would sell quickly and may still incur costs (council tax, buildings insurance, utilites etc) if left unoccupied beyond a certain number of months. Could OP afford to pay council tax on this inherited property if it took many months to sell?

Is it in a student city or town to let to students, we couldn't let our house to students as nearest university is about 15 miles away

From what I’ve read in newspapers the biggest reason is piss all profits because of increased interest on their mortgage repayments, which of course doesn’t apply to OP

Correct, but OP would lose her £500 a month benefits and would have to pay 21% tax on that income (£240)
would need landlord insurance,£20, would have to pay her letting agent 15% so another £180 annual gas safety certs, annual boiler service, co2 monitors, and ongoing repairs.
That only leaves 2 to 300 a month max as profit and she would need to build up a repair/emergency fund.
One bad tenant who trashes the place or 2 rent payments are missed and she's lost all that year's profits.

There’s a national shortage of homes to rent, and as I said, I realise it’s not practical to rent it out now but in maybe six months during which time she could save or get a better paid job to pay for any repairs or refurbishment, now or in the future. Let’s face it, it doesn’t have to be a palace, especially if she rents to students. Taking on more debt is another route, probably nobody would agree with me on this as she’s already got £20K debt, but it would eventually pay off as it were if she could keep the house as a buy to let property.

"Palace" or not, students or not, it would still need to meet inspections/certification/fire safety regulations for multiple occupancy etc.

I think taking on more debt to get the house certified as fit to let would be ill-advised in OP's position (that's assuming anyone would lend to her).

She's said she's made bad decisions in the past - I wouldn't encourage her to jump into another poor decision on the basis of perhaps being able to save up enough in a few months to fix the house up, or perhaps being able to find a better paid job.

Hope this makes sense:

The house is worth £80K minus £20K debts minus say £3K for legal fees and estate agent fees that leaves £57K to put down on your council house as deposit for RTB and you would have to take out a mortgage for the rest

To me, and I may have this wrong, this would leave you in a worse position than if you moved into the inherited house as you will lose your rent element from UC but now have to pay a mortgage

Hope I've understood this correctly