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.

This is what I would do!

She will still be allowed to continue renting her council house if she owns a property and rents it out, as long as she continues to occupy the council house as her only or main home. If it is a council property she will have a secure tenancy. Personally I don't think it's the financial decision that makes the most sense, but it would be legal.

Why would people advise selling the house in order to buy the Council house? You are paying through the nose when you take out a mortgage because of interest rates. Over the mortgage period the interest she’s paid would be huge. I don’t get it? She’s been given a house which will cost her zero. Financially it makes no sense to sell that in order to take out a mortgage on another house.

What would be the point in selling to buy another place with a mortgage? This place is mortgage free.

There are many costs involved with selling and buying (solicitors fees, stamp duty, estate agents fee, etc ect) and you need cash for many of these.
You would be far worse off.

In your situation I would keep the property and rent it out. The money from the rental would more than cover any maintenance costs - unless the house is very very dated and everything needs redoing. Just keep a little aside every month.

Otherwise, if you feel this will affect benefits and you will be worse off, keep it and don't rent it. Just have it ready for when your children leave home and/or you retire.

Then work your way up at work as you've said you'd like to do. Things may look tough financially now but what about when you retire? Or when your children leave home and you don't have as much financial help?

If it's just dated in terms of decor, buy some tins of white paint and go over on the weekends and paint the house.

The riskier option but what you'd do if you wanted to become a property investor is keep the property, rent it out and mortgage it. Use the cash from that mortgage to buy a second home and so on and so forth - very risky and not as appealing now with the extra stamp duty.

She can't save it. Her rent is being paid by benefits. If she has savings, she has to start paying her own rent meaning she eats into the savings each month. It will dry up soon enough...

I’m only telling you what I would do. It’s up to you if you take this advice:
find out what mortgage you could afford if the repayments equals what you are currently paying in rent.
use the £80,000 ( minus solicitor and removal fees) as a deposit and buy a nicer house for you and your family.
this is an opportunity. All the very best of luck and love for your success.

@Gbtch op isn't paying rent as uc covers her rent

I have not read the full thread and wanted to say, if it hasn't been said, there are lots and lots of free financial planning Podcasts and you tube vids about. The best by far IMHO is Meaningful Money. The latest series really talks about building your own financial operating system (budget, emergency fund, debt repayment, pensions and investments for the future). It really has helped me get educated and points to lots of free tools to help you make the right decisions for you. Good luck OP

Oh, I didn’t realise that. Goodness me. It seems like such an opportunity but difficult to know how best to profit from it

Meaningful Money podcast

THIS

The 'advice' is absolutely appaling.

There is a lot of regulation to rent out any property now and lots of tax implications as well.

The rent a room scheme/taking in a lodger is a lot more straightforward. Some people saying they wouldn't want to do this with kids, but lots of people do out of necesity and you can make up to £7500 tax free per year doing this. Can be selective on who you accept.

Just be aware that renting the house out, buying a property or flipping properties all come with other costs esp in the long term. On £24k a year, these may not be sustainable, and what's left after paying off your debts might not last long.

Moving to the house is probably the best way forward.
Zero rent or mortgage repayments and a home ow worship will offer you permanent security.

You will still be entitled to government top ups, use any surplus money to pay down your debts and then reassess the situation, your circumstances may change and you can consider taking out a small mortgage or a secured loan over 5/10 years to pay for home improvements.

Purchasing a property now will incur solicitors fees, stamp duty , mortgage arrangement fees and survey fees which you will struggle to finance.

It MIGHT a be worth looking at buying your property if you were to receive a huge discount but a house is your home and your security and location is the biggest consideration.

Otherwise, if you feel this will affect benefits and you will be worse off, keep it and don't rent it. Just have it ready for when your children leave home and/or you retire.

You don't know how old OP's children are - it could be many years before they leave home, if at all.

OP would be liable for Council Tax on the unoccupied house. It will deteriorate if left unheated. It will be vulnerable to undetected leaks, missing tiles, damp, mould, vandalism, squatters. Ideally she would need buildings insurance on the empty property.

What do you propose she would she do about services? Pay the standing charges on electricity, gas, water in order that she can use these when she makes regular visits to property to check its condition on top of paying council tax?

Council Tax discounts on empty properties may be levied at the discretion of local councils, but be aware of this:

https://www.gov.uk/council-tax/second-homes-and-empty-properties

"You’ll usually have to pay Council Tax on an empty home, but your council can decide to give you a discount - the amount is up to them. Contact your council to ask about a discount.

"If your home has been empty for 2 years or more you can be charged an extra amount of Council Tax (a ‘premium’) if your home has been empty for 2 years or more.

"How much you pay will depend on how long the property has been empty. You can be charged up to 4 times your normal Council Tax bill if your home has been empty for 10 years or more."

An unoccupied property is a liability.

All these points and more have already been raised by concerned posters in this thread. Please read the thread before making suggestions that she leave the house unoccupied for years until the children leave home or she retires or she becomes a landlord and rents it out.

If it's just dated in terms of decor, buy some tins of white paint and go over on the weekends and paint the house.

There is a good deal more to preparing a house for renting out than slapping on a few tins of cheap white paint.

To avoid people going round in circles, will the OP clarify what the current status of the relative's estate is?

Has probate been obtained?

Has the estate already been settled by the executors?

Are the executors family members or a bank, solicitor or probate firm?

Has the property's title already been transferred to OP's name, that is, is she already the legal owner and for how long has she been the legal owner?

Does she have a copy of the will?

Does the wording of the will leave the property to her to use or dispose of as she pleases or does the property have to be sold by the executors and the proceeds of the sale, less expenses, pass to her?

Does the estate have any debts which will be covered by other assets?

Who told the OP that she had inherited a property. If the executors, have they given her a copy of the will already?

Did the executors have the property professionally valued when valuing the entire estate or has that figure of around £80,000 come from a party other than the executors, or from looking at Zoopla estimates, for example?

You could live in the new house rent free while you work on your new career. If you like care work switch to a health care assist in a hospital better pay than care homes same job. Also they will put you through your nursing and work your way up the bands. I’m in my 40s and been offered to do it a lot of people do it even in their 50s upwards. A chance to work your way up while working. It takes 3/4 years and by the time you finish will be on a better wage and pension for you to live better more secure.

apologies for my waffle, there was more but I have condensed it. Hope it makes sense & you’ve got this mummy

I think you should sell the inherited house, sort your debts, buy a safe doo’er upp’er where you want to be & make it your own. Housing security is hard to come by when you work your fingers to the bone but never seem to have anything to show for it so I would see that as almost a must & remember you can get half hour of free legal advice from solicitors.

We all make mistakes. I, like you, worked hard all my life yet have no money & next to no possession to my name & the possessions I have are all mismatched, worth nothing, ‘inherited’ aka dumped on me or picked up 2nd hand.

For me I thought own my own home would come one day when I met the right person then we would settle down & start a family.

Never did I think at 32 I would find myself pregnant, alone & having to decide between having the baby & continuing with the Navy career I had just signed up-to.

On one side I was soooo lucky to be pregnant as I have PCOS & I was told at 20 I would need medical help to get pregnant naturally.
On another side the baby I was now carrying had been conceived outside of a regular relationship but despite my medical issues & the morning after pill (condom split) baby clearly wanted to be here.
On another side was the Navy, map making career, a big adventure & finally a chance to earn a decent wage so I could settle down myself as I hadn’t met the right person to do that with & then there was the baby. The adventure that could be & the wonder if once I got hold of dad & thanked him for having super sperm & giving me something so amazing he might fancy giving things a go. It was not the 1st time we had spent time together that year, we’d talked about our plans for the future, we seemed to be in the same path & we got on so I thought no harm asking & I will admit my heart yearned for him as he gave me something I had resigned myself to never having.
The relationship wasn’t to be & neither was the navy career as I couldn’t just get rid of my miracle baby who had survived despite many odds being thrown at them so I made the scary decision to have baby alone & he was already shacked up with someone else but it took 3 years for me to find that out when I finally tacked him down on Facebook.

Great pregnancy, I was very tired the whole way though but only she 2 days of heartburn & sickness because I was addicted to ginger biscuits , barely a foot in my ribs, organs or bladder, no aches, no pains, no sore hips or anything then labour hit…

… bare in mind here when I found out I was pregnant I was pretty fit, healthy - bar a coupe of hormonal issues -, very strong & 9months off joining the navy but nothing cold have prepared my body for the marathon that was labour…!!!

Grateful I had very little pain BUT I was left to go for 110hrs before they have me an emergency c-section, I contracted e-coli while in surgery & I have been left disabled & unable to work…
I now cope but don’t live. I do what I can with & for my child, dad decided the wanted nothing to do with our DD as it turns out he was already with someone else who he has now married & had kids with.
It hurts but he lied to me but he has also lied to her about us so I dodged a bullet there.
I have a precious child I was told I would never have & he pays his way because he has to.
We get by ok but when CMS stops in 5 or 7 years I’ll be destitute if cost of living is like it is now, I don’t clear all my debts & get better so I can go to work.
After 12.5 yrs battling Extreme fibromyalgia, CFS, PTSD - I loved One born every minute before I had baby now I can’t watch a second of the show as it shows parents going through nothing like I experienced & it feel bereft - anxiety, panic attacks & severely weakened back & pain I fear I will never work again.
Despite wanting to work & looking for jobs I think I could do my body won’t let me.

No-one knows what the future holds. Certainly didn’t see mine like this but I have an amazing daughter & we are doing ok.
Xxxx Take a leap of faith in yourself. You deserve success xxxx

This is going round in circles and not helpful.

if the OP sells the house and clears her debts, she will have £55k. Her benefits will stop until that’s £16k, she needs the benefits to live off and so will have to spend the money until it’s gone and she can get back on benefits - then when her dcs grow up, she’ll no longer get as much in benefits, will be still expected to cover the rent so will probably have to move to a smaller council property and never be able to own her own home.

if she moves in, she can keep all but the rent aspect of her benefits, she’ll live in a better area and will have a secure house no one can take off her, but will need to continue paying off her debts from her wage and benefits.

I would move in and view paying the debts like saving for a home.

All these houses with a collapsing roof, dry rot, damp - whatever. You wouldnt think that millions of people live in their homes for years not doing more than a lick of paint. Sure most people do a lot more than that but it is usually non essential. A roof should last 80 years.

The reason for selling but buying the council house is because 1. she is scared to move and 2. she may have to to settle her debts. It's possible she can buy her existing home at a large discount so have debts settled and still be mortgage free.

OP are you so scared of life that you will pass up the chance of being £163 per month better off with your UC? You can check that out at https://www.entitledto.co.uk/

That will more than pay your house insurance -even if you currently pay nothing for contents insurance. Any friends who have houses who can look your aunt's property over with you and reassure you about some of the dafter people trying to scare you?

You need to establish what your debt management deal is and if you have to sell the house. You maybe didnt fully understand what debt plan you have but you've had time now to find out. You also need to be explicit about whether your debts are 10k or 20k.

People are still not getting this. If she sells the property she will have legal fees and estate agent fees to pay so the £80K comes at best down to £57K allowing £3k (estimate) for the fees and £20K to clear debts

If she buys another property she will again have legal fees and estate agent fees and maybe stamp duty - not sure on this. I don't think OP can afford a mortgage so not sure if £57K will do this so I don't see how OP can afford to sell inherited property and buy a new property

RTB - again estimated £57K to buy council house. I'm not sure how much it would cost for her to do this but I'm not sure there are many council properties you can buy outright for £57K and she will have legal fees to pay to do this and I don't think she can afford a mortgage

I personally would move to the inherited property but OP has issues with doing this

I'm not sure what the best thing for OP to do is given the information she has provided and what she has stated about her thoughts on moving to the new property. I think OP really needs professional advice on what best to do but she says she can't afford this so I really don't know.

It needs to be taken into account that £80K is not what the OP has in reality to spend on either RTB or another property

If she buys another property she will again have legal fees and estate agent fees and maybe stamp duty - not sure on this

You don't pay estate agent fees as a buyer.

Stamp duty does not apply when you buy a property under £250,000.

If you are a first time buyer, you don't pay stamp duty on properties up to £425,000.

Stamp duty would not be applicable to the OP, unless she bought a property between £425,001 - £625,000.