What to do with inherited house

[dulcieM]

Looking for advice as struggling to decide what to do with it. It’s mortgage free, structurally sound needing only minimal decorating. Our house is mortgage free and we have no debts and don’t know whether it would be more sensible to sell it or let it (no experience in being a landlord). What would you do?

Sell it. We rented our inherited house for a few years and it was a nightmare. Wish we had sold it right away.

Depends entirely on the rental potential of the local area and type of house. Talk to a letting agent and get an idea of likely returns - varies hugely! Compare to other possible investments (assuming you want to invest and not spend). Don't forget about capital gains tax when you do ultimately sell.

Is this an area you would have thought about investing in if you had happened to inherit? If not, then it is probably not that good an idea...

Thanks for the advice.

It’s not an area I’d have invested in - it’s a nice area but I have never had any interest in investing in property anywhere.

In a similar situation a couple of years ago, we sold. I looked at a few threads on here about renting and the hassle of it put me off. Everyone’s circumstances are different though. We had a mortgage on our own home so used the money to pay that off which you don’t need to do. We also have DC so invested in JISAs and premium bonds for them.

Thanks Letsrunabath what was a nightmare about it?

Sell it. We became landlords because of an inherited property and it was a complete nightmare and not worth the hassle for the return. House prices are high now so cash in when you can.

Sell it! Honestly being a landlord is a pain in the backside, enjoy the money.

Thanks everyone! What was a pain about doing it?

Sell it. It's not worth the hassle. Government is taking a bigger and bigger cut. Tenants in general don't look after property if they're there short term. Expensive decorating and replacing broken white goods is never ending. Garden not looked after. It will be a money pit.

Op I’d talk to letting agents and work out a budget/ projected income before you decide not let it. Rules are changing like rented houses need to reach a higher environmental standard so you may not want to spend money upfront on insulation etc to get it meet standards.

yes it could be a hassle, with a rubbish letting agent, but then what would you do with the money if you sold it? If inflation is 10% and the house is worth £500j that’s £50k gone in a year that you won’t get back. If the value goes down because property goes down it will at least go up again.

So to me the decision would be based on what else I could do with the money.

My sister and I inherited a house from our late parents and didn’t want the hassle of renting it out. Also as it was our family home we ( ridiculously I know!) wanted a new family to be able to get on the ladder/upsize and enjoy my dads beautiful garden that he has developed over 55 years. I don’t mean that renters wouldn’t do that by the way.
We split the money and used it to upgrade our own homes.
As is the way of life, it didn’t work out like that of course! A family moved in, completely renovated the ( tired60’s/70’s) house, paved over the whole of the garden and resold after a year making a whopping profit!
I couldn’t be bothered with hassle of being a landlord. I don’t want to be paying a letting agency, but don’t want to be called every time something went wrong either. Or have to do self assessment tax etc now I’m retired.
Then after renting, if you want to sell it you have to do capital gains tax etc

In our experience the first tenants painted everything extremely badly and resulted in paint all over floors, worktops, exterior doors etc.

The second tenants obviously didn't own a vacuum cleaner or mop because they didn't clean for the entire 2 years they were there going by the state of it when they moved out.

Then there are the legal things like gas certificates, hard to get when your tenants don't want anyone coming into the property, probably because of the mess!

A friend had one tenant not pay rent and she had to go to court and this left her £8.5k out of pocket by the time it was resolved and when she got the keys back to her house they had trashed it terribly, think all kitchen cupboard doors ripped off and bath panels kicked in.

It's pot luck if you'll get good tenants and even if you do the government is making it harder to be a landlord due to ever changing legislations. Don't go into it blind, look into the legal requirements before you decide anything.

My siblings and I inherited my parents house in 2018. We sold it. We never considered renting it: it was a fairly large house in an area that isn't in particularly high demand for renting, so it wouldn't have made any sense. Generally smaller homes make higher rental returns. Plus my youngest sister wanted to use the money to purchase a bigger house for herself, not to invest.

I used the money (and a small increase in our mortgage) to buy a small house in the city where I work which is popular with tourists and other visits. I am renting it out as an airbnb using an agent. It is almost no work for me and making a very good return. My plan was to also use it to stay in myself sometimes as my commute is quite long. But it's so booked up that hardly ever happens.

Definitely a better option than just renting out the home we happened to inherit.

@mast0650 that sounds a very good idea. We felt the same about our old family home, too big and not in a popular rental area.
I transformed my small, downsized “post children leaving home “ house and it’s given me so much pleasure. My dad would be delighted that I was able to do that. I still look around it and say to myself “ thank you Dad”

Property maintenance, tenants generally don't give a toss

thanks everyone that’s really helpful.
Knittingnanny2 what you did to your own house with your father’s legacy sounds like a great idea.

I changed a too hot/too cold conservatory into a proper extension room, new paving and fencing, shed etc front and back, new bathroom, new carpets throughout.
I paid the last small bit off my mortgage and used most of the remainder to “ pay” me a yearly “ salary” from 60-now as I don’t get my state pension until later this year aged 66.
I’ve done so much with my half share and it gave me the opportunity to retire from teaching at 60 instead of 66 which greatly improved my quality of life
I also gave my 3 adult children a few thousand each.
I was at a point in my life where a lump sum was far more useful to me than ,say, 500 a month from rental

My MIL rents out her bungalow as she now lives with my BIL. There are different Landlord rules in different parts of the UK. The bungalow is in Wales and they now rent via an Agency.

They have been lucky that they have had the same tenant for over five years, who is good with the property. The problem with this is that my MIL struggles with putting up the rent, as the person she rents the bungalow to is a single parent and she feels sorry for her. Becoming a landlord can feel like a more personal investment. (In addition to this she also has a personal attachment to the house as she lived there for 15 years). However this will not be such a difficulty for you and you would be more business-like.

My MIL gets on average around 65% of the rent after paying, tax, agency fees, maintenance, insurance, gas checks, etc. I know this because we complete her tax return to the Inland Revenue. However, she is keen to maintain the property to a high standard.

If you are going to rent it out you might want to consider getting a survey on the house so you have a good idea of likely maintenance.

In saying all this it has not been a bad investment, as property prices have substantially increased over the last five years.

Good luck with your decision.

I inherited a house and I rent it out. I’ve enjoyed turning it from a very tired property ( it was my dads rental property) into an attractive dwelling. I also enjoy the monthly income. It has not been without stress or hard work and being a landlord was a very steep and at times scary learning curve. I’d acquired a lot of knowledge previously as I’d had to manage dads 2 rental properties while he was still alive, as he was too ill to do it himself for the last 5 years. The other benefit is you keep the property and benefit form the increasing value , although eventually when you sell there will be CGT to pay. If you want to do it, I strongly recommend joining the NRLA, doing some of their courses and renting out via an agent at least for the 1st tenancy while you learn the ropes.

This thread. Jesus Christ.

@Ballcactus
bit depressing, not all tenants are horrible

Agreed!

If you sell it, do you have children who you could then help out with a deposit for a home?
Do you have a child who would be able to save up money for a deposit for a house if they could live in it for a few years?
If you sell it and put the money into another house in your name, you'd be liable for additional second home taxes.
Selling it might give you savings which could then allow you to do more salary into pension stuff.
Or you could sell it and have a wonderful life!

I’d sell. Being a landlord is no fun, not in this era when the council force people to squat until the landlord gets a court order or claims they made themselves homeless. I couldn’t be doing with the hassle personally so wouldn’t hesitate to sell it

I'm going to go against the grain and say consider renting. You say the house is in a nice areas so I assume the rental income would be several thousand pounds per month so even after tax and all other expenses, you will still have a good monthly income and you can sell the house if you change your mind. We rent what was my PILs house for 6.5 k per month and our tenants have been wonderful so far.