AIBU-property let

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I am extremely fortunate to have inherited a property many years ago. Initially, I lived in the property but when I met my husband we bought a property together, and I decided to let the inherited property.
I have always let the property for well below market value-enough to cover my expenses and a little profit, which is saved .
I am currently pregnant with our first child. The rental and the small profit will help cover costs during my maternity leave, and subsequently for the child's future.
The property is currently rented by a friend of a friend. Our agreement-which is all done officially via the letting agent- is due to expire. It was for 12m but renewable.
The rent is half that of similar priorities in the area and I'm happy with this as I feel I'm helping someone who would otherwise struggle (and I am very fortunate to have this property).
The issue is: the letting agent inspected the property last week and there's a number of issues, mainly due to the property being neglected by the tenant. For example, chipped kitchen cupboards, stained carpets, few broken floor tiles. Chipped plaster on the walls. There are other things. The letting agent's assessment is the property is not being looked after.
I am aware the tenant's partner, who also lives there, has been unwell (hospitalised) so I appreciate things slide and I can understand this.
However, I cannot help feel really irked by the fact I'm trying to do something good but it feels it's not reciprocated.
I have the chance to end the tenancy when it expires but I know the couple will struggle hugely without a half-price rental. I also feel very uncomfortable given his partner's ill health (she's currently not working).
AIBU to end the tenancy?

Edit: six years not 16 (previous post)

If at all possible I would go and see the property myself to ascertain the damage before giving notice. Speak to the tenants about when might be a good time for this.

The agents might want more commission than they're getting. They may also not have been doing their job re: repairs which may well have been flagged promptly by the tenants

You're only getting half the story currently. If you're keen on doing these people a good turn and are reluctant to give notice for profit reasons, go and see for yourself.

Have the agents taken photographs? Do you know the repairs they are talking about are necessary?

It depends on your costs, but certainly you need to budget in for repairs as things do break and need replaced, especially in 6 years (plus however long it was there for before you inherited it).

MariaG10:
Thank you. Yes, it is becoming less attractive but I've prob not helped myself.
The replying have helped me think about my motivations over the last six years. It's wonderful to help people and it helps me keep a clear head but like a pp said, the plan all along was to pass on the wealth to children, should they come along in the future (my thinking at the time)

That's my plan for this week. I really try to be fair to people so I wanted to see things for myself.
Good point from pps regarding letting agents potentially looking at new business/charges

Have you at least put the money aside for the eviction process if it’s necessary?

If the tenants are in a tough situation and are likely to be needing social housing then they’ll most likely (in most areas, some are different) be advised not to leave until they’re official evicted.

This is catching a lot of LLs out atm as people simply have no choice but to stay put if this is how their council works.

Thank you everyone for taking the time to reply.
I'll establish next week the state of play regarding the repairs and assess the evidence/photos.
If genuine wear and tear or negligence I have to put right at a cost. The below market rate rental over six years means the 'pot' available is far smaller than it could have been resulting is the small profit made being even less.
Lots to think about going forward.

I have some cash from the profit over the years but the pot is nowhere what it could have been with market rate.
Good advice, thank you.

I used to rent out a property at a little below market rate. The tenants both lost their jobs over covid and couldn't keep up with the rent. I allowed them to stay because I felt sorry for them.

As bad luck would have it, some very very expensive repairs and maintenance became necessary. They were more than I had received on rent so I lost thousands over the course of several years.

I ended up having to sell the place because I could not afford all the works so the tenants lost their home.

You need to act now, both in your interest and the tenants'.

Tbh I think you need to work out what your aim for the property is.

The pot is smaller than it could have been, but that’s because you made a decision that profit wasn’t the main aim. Thats the situation I’m in - profit isn’t my main aim. I’ve kept things at a point where the property hasn’t cost me anything and it’s in an area where house prices increase so that’s the long term benefit for me/my children. Long term, lower paying, reliable tenants were my active choice because of that.

You seem to be in a situation where you originally opted for long term stability over profit, but now wish you had the profit.
As long as what you have covers your costs and leaves you a bit left over then you’re still in the position you intended to be in. You just need to work out if you want to change your aim going forward.

Sorry to hear this happened to you.
You clearly tried to do a good thing but the person not benefiting turned out to be you.

The replies have helped me focus and I'm
pleased this has happened as I would
have continued as I was and could ended
Up out of pocket...by a huge amount

If you think you’ll get any thanks for renting it on the cheap you’re sorely mistaken.

Theyll hate you either way, so kick them out, refurb it and re let it properly.

This. You could still let for a little under market value to be picky about tenants you get. I do this.

OP you need to factor in repairs and maintenance when setting the rent. You could simply up the rent a bit to cover repairs but you'd need to give at least one months notice of rent increase. I always give 2 months notice of a rent increase, giving tenants a chance to look around and see if they can find anything cheaper and still give a month's notice to me if they can. They can't because I check rightmove before increasing rent and keep it a little lower than market value if I like the tenant and they pay on time.

End the tenancy, giving them lots of notice and inform them that you are selling it.

Put the proceeds into your pension and ISAs bit by bit, but as quick as you can to get maximum tax relief in the pension. Basically put as much as you earn into your pension - upto £60k per annum - but the amximum amount includes the tax relief so if you earn £50k you can put in £40k and get £10k tax relief added.

If you have a SIPP then you could even just keep it in cash or cash equivalents (money market funds) and get 5% interest with no risk (other than inflation of course).

Property in the long term is one of the best investments, you are v lucky you have no mortgage on it to worry about. Going forward you should reassess the way it’s managed, it’s fairly easy to self manage if you have good trades you can call on. You can use the service of the EA to find you a new tenant, do all the background checks, hold the deposit for you and draw up the contract. You do not need to pay them a monthly fee. It is up to you to decide what rent you wish to charge but do advise it needs to work for you.
You will need an ECP certificate before renting, Gas and electricity certs, legionnaire check and PAT test for goods. It only takes a little bit of organising and your asset is really working for you whilst generally there isn’t much to worry about if you have a good tenant. Keep up communication with them and it should stop any unexpected nasties

Just be aware that as a landlord, ending a tenancy isn’t as easy as just not renewing it at the end of the term. You have to give the tenants two months’ notice and issue a Section 21 and hope it all goes without any problems. Your letting agents will be able to explain this fully and do the necessary paperwork. Do make sure you do everything by the book or it could make the whole process really difficult and drawn-out.

i had this with a rental property (tenants caused a lot of damage, requiring a near total renovation and I decided to sell it) but if you do decide to re-let it, then make sure you’ve budgeted for repairs and maintenance in whatever rent you set.