Should we keep or sell this house? A dilemma.

[Kymble]

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.

I think as well, you need to think about what you are saving for.

I think many of us were just brought up as people who 'saved for a rainy day'. It took me being diagnosed with cancer (fortunately now all gone) to start me thinking that actually I'm almost certainly considerably more than half way through my life.

We've got to a stage where we are much more comfortable than we have ever been in our life, and started me thinking, well, why am I so keen on putting away £x per month ? Who is it for? If it's for the dc, then - as you have 3 in your 20s - I kind of suspect that giving each of them a considerable sum towards a house (or house deposit) now rather than when you pass away, will actually be more useful to them (and help avoid inheritance tax). When I do my 'fantasy planning' for when I come into a large sum of money, {not sure where it's coming from, as I don't even buy a lottery ticket } it tends to be all around how I could help my dc, as, quite frankly, I'm not a "things" person. There isn't really anything I'd want to buy. I do like travel, but I'd want to be spending the cash now whilst we are both fit and healthy enough to travel, rather than continuing to save until our 70s, when, in all honesty, we might not both be fit enough.
I think it's worth asking yourself why you want a large sum in the bank in 20 years time, or if, on reflection you'd rather actually have it to spend now.

However, as MrsNuckyThompson says, now might not be the time to be making the decision. If you spend money doing it up, you will probably recoup that if you sell, or it will make it more rentable if you rent, but it will give you a few months to think about it and make what is going to be a big decision.

As Backforgood says, sell and give the DC's c£75k each to be used as a deposit on a house/pay off mortgage (if they are not in that position yet, then put in bank to give to them when they are). Remaining £75k (plus cash) into a high yielding share portfolio (max out ISA's) and use for holidays for the next 10 years.

Sorry for your loss.
Personally I would keep it. I would only sell a property if I had to. The last one we sold was around the late 90's, have only ever bought since then. It's about the best investment for your money imo. You will get an income that you can use to help dc or for holidays and if you sell I bet your money will dwindle away. I am sending this from our holiday home which has made us over £10k this year, is still an asset and available for us to make use of whenever we want so I am obviously biased.

Sorry for your loss

If you can afford it, inwould sell it and split the money between your three children with the proviso that it is used for their own homes

That way "Dads house"'lives on in three new homes that you can make memories in

Sorry just read full thread and seen this has already been suggested

I wouldn't make any decisions right now. I would target after the New Year to get the property de-personalised with a coat of paint and whatever other essential maintenance needs doing. Then I would probably rent it out for 6 months or a year and re-consider what to do then.

Could you move into it and sell thr property you live in now?

If you consider the property in terms of an investment that is totally managed (by using an agent (they normally charge around 10%), which is exactly the same as putting your £300k into equities and bond asset classes totally managed by a broker/asset manager, then a simple analysis of the numbers will remove all the emotion and the decision can be made on the best investment return. A £300k property asset/(£12,00 rent - £1,200 management fee) = 3.6% return in capital employed, which is poor for property. Typically 5-7% is more normal. If you invested a small amount of cash to re-furbish the property that could increase the property value and provide a bit more return on capital employed. Compared with investing into equities and bond asset classes, a broker should be able to build you a balanced portfolio with a low risk profile that should return at least 7% return. To make the whole thing more tax efficient you could put the money into a SIP pension and let the pension invest in a balanced portfolio. Good luck

I'm no financial expert but I think Tatey has sound advice.

I think firstly you need to decide IF you are ready, emotionally, to make a decision. If not, leave it a while - nothing's likely to change much, certainly nothing you can predict.

Then once you are ready to make a decision. Consider all the factors. Emotional - do you want to keep the house, rent it or move into it etc. If not, then go straight to the financials. Sounds harsh, but if you're not keeping it for any emotional reason then it's now just an investment.

In which case, there's all sorts of options. Maybe spending some money on it to make it more rentable, is the better option. Maybe you sell as is, and invest the money yourselves. Sell it, and split the money with DC if that's what you want. Spend some money on it, to potentially increase the value, and sell it at a higher price. If you've emotionally detached from it, then you're just deciding how best to invest 300k.

If you're not emotionally detached, then no financial investment advice will make sense yet.

It's one of life's ironic problems. 300k investment could make a wonderful difference to most folk, but most of us would prefer we never were in the situation of having to think about it

OP I am a landlord and it can be stressful, it can be easy. Some agencies are very good.

Have you had any local advice from estate agents? The national picture can vary.

Also consider going to see a financial advisor.

Thank you for sharing your experiences and opinions - it is good to get a range of different perspectives.

I think we have ruled out selling the house in order to buy different rental properties. If we are going to be landlords then it might as well be this property and we can avoid the buying/selling costs.

I am fairly convinced that spending some money improving the house would be a good idea. It will make the house more saleable/rentable and so would not, ultimately, be lost money. Also, it buys us some time and (as Bouncy suggested) would depersonalise the house and make the emotional attachment less strong.

Tatey - you have some strong advice there! It does seem that the return on the 300K makes sense in a rising housing market but in a flat market, it is much more marginal. Although the uncertainty surrounding other investments is also a worry.

We have discussed the various options and have decided to take some advice on how much it would cost to do the improvements and how that would affect the rental value.