House or the money

[Moneymaybe]

I’ve inherited a house and I do not know what to do with it. I know I’m in a lucky position financially, but I would prefer not to be given the circumstances that have led to it. This is making it particularly tough to decide what to do.

If I sold it, I could pay off my mortgage (just over £1k a month) and have around £150k in savings. Or I could keep the house and rent it out for around £1800/month after tax.

I can’t decide if I’m better to pay off my own mortgage early, or to use the rental proceeds to pay my mortgage, have a bit extra a month and then have the house as an asset to sell later down the line when my kids need money for deposit/weddings etc.

I will make an appointment with a financial advisor, but in the meantime has anyone any sage advice? I feel so lost!

Being a LL is hard work and don’t forget you will be taxed on any profit, Making Tax Digital is coming in for landlords in 2026/7 which means quarterly tax returns and all digital records, so you’ll have to pay for and use accounting software.
There will be Capital gains tax when you come to sell too. You only get 9 months grace now rather than 3 years.
I’d get rid and put some money into your pension / invest it / fixed rate savings.

Renting out a property isn't always plain sailing so that's worth considering, the place could be well looked after and someone may pay on time every month but on the other hand the place could end up getting trashed or the person may not pay the rent...it depends if you want the hastle of all of that. If it were me I'd probably pay off my own mortgage and have the rest in savings.

Personally I would sell, pay off my mortgage, have a nice holiday and then invest the rest.

But having rented out my house for some years when I was working abroad, I found the whole landlord thing to be a nightmare with moaning tenants, constant repairs and work to be done and then having to sort out the tax returns.

But others will tell you to rent the place out for an additional robust income.

There couldn't be a worse time to be a landlord than now to be honest.

Especially an "accidental landlord" with one property.

Sell it and invest the proceeds instead.

How you doing with your pension? You could make a good amount of money investing as much as possible into a pension and potentially retire early.

Sorry to hear about your loss.

£150k could make you a solid £6k or so a year in high interest savings which is about £500 a month. Coupled with bit paying the mortgage you're about £1500 a month better off, and it's low risk. You would probably pay tax on interest.

Keeping the house would net you about £1800 a month minus tax which is more, but, you have the cost of upkeep and all the faff and risk of being a landlord. The house might appreciate in value and you'd pay capital gains tax on any increase. You also might get the tenant from hell or long periods of no tenants.

I reckon, on average, you'd get about the same outcome but keeping the house has a wider range of potential outcomes.

I'm so sorry you lost your loved one.

I wouldn't be a landlady now - it's hard to get reliable tenants and it's expensive keeping up with all the duties of a landlord.

I'd sell the house, pay off my mortgage, invest the £150,000 (mixture of pension and savings) and use £500 per month (that used to be the mortgage) to improve your lifestyle and £500 to save for expenses that come with your house. And every day I'd thank the person who left you that house that they've made your life so much easier, in that way, at least.

If I ever became a LL I’d like to think I’d be a good one however I really wouldn't be, I’d be rubbish

i don't understand what being a LL means, what happens if things go wrong or I got a bad tenant

sell the house and as PP said invest the money

I think it really depends on the house? Is it in good condition? Is it in a place with a good rental market? Large city or university town? So you would get a reliable income?

Is it in a high value area (so unlikely to lose value over time)

If so might be worth looking into renting. Don't forget that you can always rent while you are deciding but if you sell that it gone.

It sounds like the choice is being richer by 800 per month with the LL risk and mortgage paid (by the remaining 1k) and keeping the asset.

Or being 150k lump sum richer without the risk and with you mortgage paid off but without the asset.

The lump sum is only about 15 years worth of rent profit.

There is also the risk of rental income pushing you into a higher tax band too.

We were left a house which needed work doing, new bathroom, windows, boiler, complete redecorate, so about £25,000 even with DH doing a lot of the work. We sold for £350,000 instead, as I knew I would worry about tenting it out, my friend has kept her parents house, it’s in a really good area where she has long term tenants who pay a year in advance, so she’s done really well and not had to spend too much on the upkeep, but obviously she has to pay fees, insurance and tax as it’s now declared income and it’s also gone up in value a lot.

Sell the house. Being a landlord is hard work and expensive and thankless. Much better to pay off your mortgage and then invest your lump sum and excess income in a safe fund. Look on the investment boards and Martin Lewis for advice.

My advice would be to sell. I was a landlord for a while and it caused me nothing but stress and worry. If only I had invested the money instead, I would certainly have been better off.

Agree with the consensus, pay off your mortgage and invest the change, you'll nearly have as much per month but without having the extra job of being a landlord. Max out your ISA's etc. If you invest it wisely you'll still have a decent chunk to help out your kids. :) Don't give yourself the stress.

I'm sorry for your loss. Sounds like the house is not somewhere you'd move to and if you are going to be a landlord there is a steep learning curve. Even if you employ someone to manage the property you need to know if they are doing it properly as you are still liable for their failures.

So sell - max out ISAs, consider home improvements, maybe a new car, a once in a lifetime holiday to cheer you. You could put money into an additional pension or, look at high interest fixed term savings or buy gilts. You might like to plant a tree or donate a bench or something as a memorial.

Making tax digital will most likely not apply to this person as a landlord of one property.

She already indicated that it would be £1800 AFTER tax in the OP.

I think the keep the property option is the better one. Use income to pay down your mortgage. Allow for a gain in prices to pay of your remaining mortgage later and provide deposits for your kids if need be.

It really depends on how much you earn now , then how much you’d lose in tax. If I were you, I’d sell. Pay off my own mortgage and have a nice life. Being a landlord is hard work and I couldn’t be doing with the extra stress these days.

Thank you for all the opinions and advice. I have been a landlord previously when my husband and I moved in together, but only for a couple of years and frankly it was a nightmare! The house is a very different kettle of fish to the flat I let out previously however, and is luckily in very good condition.

I’d sell

I would not be a landlord, having done it twice. Have you read the renters rights bill? - renters have all the rights and landlords very few, that's why they are all selling.
Sell it and buy a bigger house for yourself as an investment abd to make life more comfortable.

If it was me and I had no children I would sell.
if I had children I would keep it. The income could be used to support kids through Uni, help them with a deposit.

The key issue for me would be time. Do you have time/bandwidth to be a landlord? You could contract with a property management company, which would probably save some time/stress, but they would take a chunk of the income. Being a landlord on your own would be time-consuming, potentially expensive (bad tenants, non-payers etc.) and quite stressful.

Being a landlord was hard enough a few years back - but the regulation has increased since then and tenants rights are likely to increase further.

If this is a parents previous home I would rethink as you may find it very hard seeing others live there and you have to be responsible for the upkeep.