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Original poster

Inherited property - sell or rent

47 replies

M0nstera · 12/08/2023 18:00

DH and I have recently inherited a property and are going round in circles trying to decide whether to sell it or rent it out. Things are complicated by me having a life limiting diagnosis. We want to ensure our family has the most secure future possible, but we also want to avoid adding extra stress to our lives. I know no one else can make the decision for us and there are pros and cons to both options but we'd like to get a range of views and ideas. I'll try and give all the relevant details but let me know if I've missed anything.

The inherited property is a 4 bed semi in a sought after location in England. No mortgage, and valued at around £335k in current condition. If we sell, at present the best option seems to be to put the proceeds in a high interest savings account paying around 6% interest.

We've been advised that if we rent it out we would need to spend around £5k on minor works to bring it up to scratch, we should then achieve a monthly rent of around £1,600. There's a shortage of rental properties in the area and the agent says it's an ideal family home.

DH and I are both in our 40's, with 2 DC. I have stage 4 cancer and due to this I'm currently working very part time and earning £10k per year (full time equivalent £50k). I'm hoping I will be well enough to increase my hours soon, but realistically I will probably have to drop back down again or quit my job altogether in the next few years or even sooner. I'm not likely to be alive to see my DC grow up. DH works FT for £55k.

We live a 4 bed semi in England currently valued at around £630k. We have a mortgage of about £180k, fixed for another 4 years at under 2%. We have savings of about £30k. Since I've had to reduce my hours we've not managed to add anything to our savings, we had to raid them recently for a new (second hand) car and we could really do with spending about £15k on our home.

What would you do and why? What might we not have considered?

Thanks for any input.

OP posts:

Redshoeblueshoe · 12/08/2023 19:32

Sell

SheilaFentiman · 12/08/2023 19:41

Sell

SheilaFentiman · 12/08/2023 19:46

Regulations for landlords are getting more onerous, it is getting harder to evict tenants if you want the property back at the end of a rental term, not bad things but not good for you at this stage in life.

LindorDoubleChoc · 12/08/2023 19:50

So sorry you are in this position OP. But definitely sell! House prices are falling. If you sell everything is simpler .

LindorDoubleChoc · 12/08/2023 19:52

Caterina99 · 12/08/2023 18:23

Sell. Rental properties come with a lot of hidden stress and costs, and it sounds like you don’t need that in your life right now.

Exactly what I was thinking. If you sell you know exactly where you are and don't have that other big thing running on in the background.

WhatdidIdoyesterday · 12/08/2023 19:59

What age are your DC? How much stress are you willing to accept in addition to your current levels?

If you're willing to accept some stress/uncertainty could you put the property into trust for your DC, effectively giving them a future nest egg while using the rental income in the short term? Its not a great time to sell, and inflation will eat into your cash if you leave it as cash.

Or, if you want low stress then sell now, pay off your own mortgage and pit the balance into your DH pension and savings for your DC future. Then if the worst happens you know they already have funds for their future needs and it won't all fall onto your DH to earn.

AllGrownUpp · 12/08/2023 20:02

Sell, pay of your mortgage, set up pensions for your DC, book a dream holiday.

xyz111 · 12/08/2023 20:05

rosiebl · 12/08/2023 18:14

Sell. Quit your job. DH ask for a sabbatical from work. Go on a round the world adventure to maximise memories with your children. While you are are off adventuring, instruct a family member to project manage the updates on your own family home. When you get home, spend the rest of the inheritance on enjoying and maximising the time you have left, and pay off a chunk of your mortgage. That's what I would do anyways.

I was going to say rent it out for any future income for the family, but after reading this post, I would do this!

Spirallingdownwards · 12/08/2023 20:06

Sell but I am going to say something really out there and potentially will upset or anger people. I wouldn't pay off your existing mortgage if you have current life assurance that is linked to paying off your mortgage on the worst case scenario where you do not survive your cancer. This would leave the money available to DH and your DC and the assurance payout to clear the mortgage if it is the type that is specifically linked to paying off the mortgage.

I am sorry you are unwell and hope you do make a full recovery in which case you may decide to clear the mortgage at that point.

rwalker · 12/08/2023 20:06

Sell sell sell contrary to popular belief it’s shocking how powerless LL is to tenant if the tenant is a bad one
you can invest the money in a fix term bond and the interest can be paid monthly as an income
I would think you’d get at least £900 interest a month in that doubt you’ll get that income renting it after you take cost off not to mention the hassle and maintenance

determinedtomakethiswork · 12/08/2023 20:09

I'm really sorry you're not well. I wish you all the very best treatment and quality of life.

I would definitely sell. Renting it would be one more chore at a time when you both need to be free of extra worries.

💐

Mumontherunn · 12/08/2023 20:14

Sell. Pay off your mortgage. Treat yourself and spoil your family. There could be time for an investment property in the future - but for now live your lives to the fullest you can. Think of it as a happy gift to you all and a sign to treat yourselves and make some lovely memories.

Boomboom22 · 12/08/2023 20:14

Sell and def don't pay off the mortgage if you have life insurance on it.

DPotter · 12/08/2023 20:16

Sell - you really don't need the added hassle and you can pay off the mortgage / debts

saraclara · 12/08/2023 20:24

Sell. My mum has a rental property which I will 'inherit' fairly soon, and when I do I won't be able to get rid of it fast enough. It's a millstone, despite having an agency running it (incompetently). I know a few people who have 'one property' rentals, and they're constantly dealing with issues. They are going to be selling up because it's just not worth the hassle.

maybebalancing · 12/08/2023 20:32

I would sell.
Pay off for mortgage and put the remainder in a trust for your dc.
That way current stress is reduced, your DH has lower future financial obligations, your dc have a cushion set aside for them.

maybebalancing · 12/08/2023 20:34

Don't pay off the mortgage if you have life insurance which would cover it obviously.
Ensure other debts are paid.
Spend time on activities with your dc and put more in their trusts.

mafsfan · 12/08/2023 20:39

Sell sell sell

We have just sold our rental. It's absolutely not worth the hassle of being a landlord with one property! You really don't want the stress of maintaining another property. It's a ball-ache even if you don't have additional stress in your life.

seekingasimplelife · 13/08/2023 16:38

Imagine for a moment that you'd received a cash inheritance of £335k to spend or invest as you wish.

In your current situation would you have used such a cash legacy to buy this house as a buy-to-let in it's present state, and spent a further £5K updating it?

If so - keep it.
If not - sell it

Original poster

M0nstera · 14/08/2023 14:05

Thanks so much for all the responses. You've helped us make up our minds that selling is the best option in our situation. Currently looking at exotic holidays...

Thanks also for the well wishes, much appreciated.

OP posts:

TooOldForThisNonsense · 15/08/2023 13:43

I’d sell and pay off your mortgage. So sorry to read of your diagnosis

Residentnumber1 · 15/08/2023 18:56

Sell

Dont pay off the mortgage as there will almost certainly be penalties for paying it back early and every penny will count.

Do the improvements to your house. Have as many fantastic holidays as you can manage

Put the remaining money into Cash ISAs so the income is tax free. Use that income to pay the mortgage so you aren’t using a lot of the capital. Any money left over put into fixed term savings accounts that pay monthly interest and use that to also pay the mortgage each month. At the end of the fixed term use the money to pay off the mortgage

I can understand the desire to have no debt, but at only 2% interest, it makes far more sense from a purely financial point of view not to pay the mortgage off and you want every penny to work as hard as possible

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