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Selling inherited property?

11 replies

sorrelly · 13/05/2020 14:41

I've inherited a house recently and had been planning to sell it. What would you do right now in the current financial context? Hold on to it? Rent it out? Put it on the market to test the waters?

OP posts:
Loofah01 · 13/05/2020 14:52

Where is it and what state is it in? Close to you or far away?

You could value it and try to sell asap or rent out if it doesn't achieve the asking price you want. Renting as an 'accidental' landlord can be a total pain though... Either way you have to wait for probate.

ScribblingMilly · 13/05/2020 14:56

Same boat. I've just got it up for sale & will see how it goes over the summer while putting together a Plan B. I won't let it go for silly money.

sorrelly · 13/05/2020 14:58

Thanks. Far away (rural), in good condition, lovely place. I guess renting out would have to be through a management agency. Yes, probate is nearing completion.

OP posts:
sorrelly · 13/05/2020 15:00

@ScribblingMilly ah, interesting to know! Thanks.

OP posts:
irregularegular · 13/05/2020 15:09

I don't think property values will be increasing for some time, so not much point holding on to it now.

I would rent it out if there is a good rental market for that type of property in the area that will give you an OK return on the capital, taking into account the extra hassle factor.

Rural, family houses don't generally give good rental returns I think.

I believe executors can rent out property before probate is granted if it is in the best interest of the estate. Best to get advice though. Tax may get complicated? And all executors would have to agree.

JustSew · 13/05/2020 15:10

Same here though I haven't just inherited it I'm the executor.
If you have actually already inherited it then I presume probate is complete.

It's going up for sale this week. I considered buying out my sibling's share and keeping it as a rental but I am shielding so it would have to do everything remotely. Some repairs needed and I really can't be bothered.

maxelly · 13/05/2020 15:16

Yes depends on a lot of factors, where is it, is it in an area that is likely to be stable or grow long term? Where are you in the country relative to the house and are you experienced/knowledgeable about property and able to manage it yourself including any maintenance required or would you be needing an agent to do that? What is your financial situation, are you a higher rate or lower rate taxpayer and what would your plans be for the capital if it was sold - investment or are you in immediate need of the cash? Do you own your own home or do you rent yourself at the moment? Have you any other investments? Is the house a desirable rental property, in good nick and easy to maintain etc or would it need lots of work (tricky to get done asap) or attract the wrong kind of tenants? Sorry for all qs, you don't have to answer, just factors in how I would make the decision if it was me.

My immediate instinct would be to at least try and sell once you have probate, if the market really has tanked or it won't sell for what you consider it to be worth you could reconsider. But then I really dislike letting out properties/BTL as an investment personally, I consider it a hassle/stress, it's nowhere near as tax efficient as it used to be, the cash is extremely illiquid (i.e. if/when you want to access the capital you have to wait months to sell the property and pay lots of fees compared to selling shares or cashing in an ISA where you'd have the money within days for example), plus you lose quite a proportion of your income every month to things like agents fees, maintenance, void periods, tenants suddenly paying no rent or doing a midnight flit etc etc. It can still be a good investment if you pick your property wisely, e.g. in areas that experience high price growth and if you keep the property for years, or if you have the skills/capital to add value to the property - a friend of mine has made a mint buying up wrecks in cheap or studenty areas and converting them to HMOs, but he is a builder and has lots of trade contacts so he can get the work done very cheaply.

Also, this may not be relevant, apologies if so, but I have a few friends who have inherited their childhood home/much loved parents home/house that has been in their family for generations and have rented it out as they weren't ready to fully let it go, it's always ended really badly, as even good tenants are unlikely to care for the house and garden like its their own, and seeing other people in the house, changes to the outside etc has proved far more upsetting in the long run than selling it - just a thought. Sorry if I've overstepped the line!

ChocoTrio · 13/05/2020 15:28

It depends on your personal financial situation. If you need the money, then sell. If not, then rent it out while riding out the recession then sell when the market looks good again.

If it wasn't for covid-19 I would be suggesting AirBnB rentals etc. Example: Hen parties sometimes like to rent out a whole place in a rural area etc.

I suspect that investors would show interest and maybe people/families that want to be more rural in response to lockdown and WFH.

JustSew · 13/05/2020 15:42

maxelly One estate agent said to me that letting an inherited property can be fraught because of emotional connections. DMs property would actually have fetched a decent rental income due to it's location and being a bungalow. However I decided in the end that if I wanted to invest in a btl I would have done it already and even fully managed it would be a pita.

maxelly · 13/05/2020 16:09

Yeah I imagine estate agents see a lot of problems between tenants and landlords where there is an attachment to the property JustSew. My normally very level headed best friend completely lost her head over the garden (in particular the rose bushes her dad had lovingly tended) which ended up a bit sad and neglected when she let her parents house out after they both passed away, she was threatening to evict the tenants and take them to court for damages and all sorts. Obviously it wasn't really about the roses in her case (!) but I think she would have been saved a lot of heartache all round if she had just come to terms with selling it in the first place as she eventually ended up doing, seems it might be quite a common thing.

GETTINGLIKEMYMOTHER · 14/05/2020 09:54

Speaking from more than one experience within this family, most practical option would probably be to sell ASAP, assuming you can get a reasonable - not optimistic (unless the property is particularly special) price. Empty houses can soon feel forlorn and unloved, and will need a certain amount of attention and expense - insurance, council tax, any maintenance, including keeping any garden presentable.

Leaving a property empty over winter is IMO particularly undesirable - plenty of heating will be needed if the place isn’t soon going to feel damp and musty. The whole process even after an offer’s accepted can easily take 3 months anyway (not to mention that an awful lot of sales fall through for one reason or another) - presumably you wouldn’t want it dragging on all through winter.

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