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Original poster

Should we keep or sell this house? A dilemma.

36 replies

Kymble · 10/12/2016 17:35

My dear father passed away this year and i have inherited his house. It has been a very difficult time and I think my emotions are clouding my judgement about what to do with it. I keep changing my mind about selling it. One day I think we should sell it as soon as possible and put the money aside for our retirement. Then I have a huge panic that we will regret doing that because it will continue to rise in value and we will have cashed in a valuable asset at the wrong time. Emotionally, I struggle with another family living in 'dad's' house but maybe that feeling will fade?

What would you do? Some background - it was not my childhood home, it is worth about 300K but needs about 20K of work to make it rentable ( which I would also inherit). Rent would be about 1000 a month. It is in the South West. We would like to retire in the next 5 years. I am an only child. We have 3 children in their 20s. Thanks in advance.

OP posts:
specialsubject · 10/12/2016 17:44

Sorry for your loss.

do you want the responsibility, hassle and possible costs of being a landlord? Is it worth it for the income? Only you can decide that. That said, what would you do with the money if you did sell? Savings rates are well below inflation and have been for some time, the stock market is high and has risks. (Carney hasn't quite clocked why there are so many BTL landlords, has he?)

you will need to let go emotionally, and that is a lot harder if you still own it.

CatchingBabies · 10/12/2016 17:46

Honestly I would sell it. Being a landlord isn't easy and can be a huge burden. With you being emotionally attached to the house it would be awful if you rented it out to someone who trashed it, at least with a sale you don't see what ends up happening to it.

SerialReJoiner · 10/12/2016 17:47

I agree you should sell. I'm sorry for your loss.

Bluntness100 · 10/12/2016 17:50

Do you live close to it? If not I'd sell it. We did this with an inherited property, and it's a pain in the backside, from the tax implications onwards, but if you're up for a little hassle and can put some letting agents in, then financially it's much better to rent it out,

Original poster
Kymble · 10/12/2016 17:51

You have both hit the nail on the head! Is the burden/hassle of being a landlord worth it? My gut instinct is to sell but literally everyone I have spoken to has said we should keep it as house prices will keep on rising.

OP posts:
Wallywobbles · 10/12/2016 17:53

What would you do with the money if you did sell that would produce a similar annual income plus increase it net worth. To be honest it'll be difficult to find something that ticks both those boxes.

Original poster
Kymble · 10/12/2016 17:53

Yes, Bluntness, it is less than a mile away. We talked today about renting it out through an agency, we would lose money but be protected from the hassle.

OP posts:
NiceFalafels · 10/12/2016 17:54

I would keep it and do the work. Is it far from you?

Original poster
Kymble · 10/12/2016 17:55

Yes - Wally - another good point. Where can you put the money these days? Stock market is risky, property market uncertain, saving accounts are giving poor returns.

OP posts:
665TheNeighbourOfTheBeast · 10/12/2016 17:59

interest rates are rock bottom at the moment - so a savings account is not much better than stuffing money in your mattress
the property will accumulate value at a higher rate than the best methods of saving even if it stands empty. but you should expect to spend a couple of thousand a year in maintenance.
Occupied will give you a steady income plus accumulated value - sure you will have to manage the property - but as soon as you press the "sell" button the you will not be able to use the money you get to buy a similar sized property. You will be out of the market really quickly.
If you own the property outright and so are not working on such tight margins you could get professional property management to do the hard work for you
If you are not risk averse you could leverage this property against a second and start a small empire. - or you could sell it and count your decreasing pile of beans.

Donatellalymanmoss · 10/12/2016 18:00

If you are uncomfortable with the thought of another family living in your dad's home, then the easier option would be selling as then you won't be involved with the people living there or know anything about it.

House prices may not rise. How comfortable are you with the thought it may be worth less at a later stage?

Have you thought about using the cash to buy different properties that you could let out? It may be easier to manage an investment that doesn't have the same emotional ties.

BackforGood · 10/12/2016 18:09

Sorry for your loss.
It really is an emotional decision though

If you sell, interest rates are so poor at the moment you will earn very little, however, you would have ready money available to you, should you want it (perhaps helping dc with a deposit, or weddings, or whatever).

If you keep it, you will firstly have to bring it up to standard, then you would have to either look after it, or pay someone else to ~ do you want that hassle?

Financially it would probably make more sense to keep it, but in many ways it' s a lot easier to deal with it, and move on. You could even buy other rental properties you had no emotional ties to if you wanted to.

Original poster
Kymble · 10/12/2016 18:10

665 - you paint quite a picture there! The thought that has made we wobble about selling it is the image of passing the house in 5 year's time and it is worth 500,000 and the kids saying, 'Why did you sell it?'

Donatella - this is the crux of the dilemma. Essentially, we are betting on the housing market continuing to rise - and it might not. The advantage of keeping it is that we avoid Stamp Duty/Estate agent's selling fees and would only pay more tax on the rise in value when we sell it.

As for the emotional connection, that is very difficult at the moment. We are sorting out his stuff and are very aware of his absence this Christmas - that makes is so much harder to make a decision.

OP posts:
specialsubject · 10/12/2016 18:18

I assure you that using even the best agency will not protect you from possible hassle. If the finances are that tight then renting is probably not for you. Void periods, non payers ( even with insurance), fixes and so on.

specialsubject · 10/12/2016 18:19

PS you dont pay stamp duty as a seller.

Original poster
Kymble · 10/12/2016 18:25

Thanks, Special - that is sadly, what I suspected.

I was thinking that if we sold this house (because of its emotional connection) to buy another to rent out, then we would be liable to pay stamp duty on the new property.

OP posts:
665TheNeighbourOfTheBeast · 10/12/2016 18:29

But she hasn't indicated she is on a tight margin. As for "hassles" most of us would work quite a few hours to make £12,000 + even conservatively 3% of 300,000 per year is an increase of 9000 in capital making £21,000 per year...even with deductions that's quite a LOT of hassle you'd have to be talking about.

AndWhat · 10/12/2016 18:33

My mum sold her mums house ASAP following inheritance. The housing prices sky rocketed within 6 months but she said it was never about the money it had been her childhood home and she just couldn't face being a landlord.
She never regretted her decision it was the right one for her at the time and it was just the gamble to take at the time.

JT05 · 10/12/2016 18:38

The delemma you described is exactly what my dear friend went through, a year ago! The difference was that she lived next door to the family home, albeit in a much smaller house.
After much soul searching she sold her father's house and her own and started afresh in a new home a few miles away. She is happy after the sadness and stress. She will always have her memories of the house as it was. Making money out of a house is not everything.

specialsubject · 10/12/2016 18:47

665 the OP said that she would make a loss if she employed an agent. usual rates are about 10% plus VAT. What we don't know if she has also costed insurances (buildings, contents, malicious damage, rent guarantee, legal expenses, home emergency), maintenance, fixes and any tax liability.

believe it or not, the rental income from a property is not 100% profit.

Original poster
Kymble · 10/12/2016 18:51

Thank you for all of your responses - they are really helping me to figure out my feelings about this.

JT/AndWhat - thank you for sharing those experiences, it is so difficult to know I will feel in the future. A 'clean break' could be good emotionally and, of course, it is not just about the money. We weren't really expecting this to happen at this time and it has been a shock to come to terms with it. So, we are desperate not to make a decision that we will regret.

I have it in my mind that if we are going to sell then we should do it before Brexit is triggered in March as house prices might fall. But perhaps that is putting too much pressure on this decision and we should take a little more time to figure it out.

OP posts:
665TheNeighbourOfTheBeast · 10/12/2016 21:27

special I took that to be ...loose a little of the profit... Not " using an agent would negate any profit"
A friend in similar position recently sold a larger house and bought a couple of flats , very much to do with easier maintenance and spreading risk. Might that work for you better ? Although there are leasehold costs obviously associated with flats, but still....?

MrsNuckyThompson · 10/12/2016 21:33

We had similar issues a few years ago when MIL died although we're younger and it had been DH's family home.

Ultimately we felt DH wasn't in the right place to make the decision. We opted to spend the £20k on the house on the basis it would not be wasted as it would make the house more saleable. It gave us the breathing space to decide what was best in the longer term and gave DH more time to grieve over his mother.

Sgtmajormummy · 10/12/2016 21:50

We inherited PILs' property and DH had a hard time letting it go. We kept it as a holiday home for 18 months but didn't use the place to its full potential (5hrs away), then rented it out for 3 yrs (that was the high life, even after fees, certification and tax!) but then had trouble finding a suitable tenant and it spent 6 months empty.
Last year we sold it at a good but not great price and bought a student let in DS's university city which he will manage and which will give him a rental income. That house will eventually be our retirement home.

I think we've squeezed a lot of utility out of DH's inheritance while maintaining a sense of separation. We never expected to receive it and count it as external to our monthly earnings.

I agree with PP who say the best return is by renting out. You live nearby so it wouldn't be impossible to manage. But you know your own mind OPand it's early days.

Sorry for your loss. Flowers

ChishandFips33 · 10/12/2016 22:17

I'm sorry for your loss - there's so much to deal with when you are in the wrong frame of mind to cope with the decisions. Imakes it so much harder to know what's for the best

If the house is local to you could you move in and rent yours out?

Time does help in the letting go and feelings of things but it's what you do whilst that takes place