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Renting out a property or selling

My ma in law is going into a nursing home and I'm weighing up the pros and cons of renting or selling her Woolwich, 3 bed end of terrace house.
Woolwich prices have increased by 10% in the last year and Crossrail is due to open in Woolwich this December.
Looking on t'net it could sell for £320K and rental income could be £1200pm.
As a rough calculation if she receives Nhs Funded care of £158.16pw and her state pension is not reduced, it may be possible her cash could last 8 years. She is 90.
One of my concerns with renting is people trashing the place, not paying, illegally sub letting and or squatters.
The house is old fashioned with a hot air blowing system downstairs only and no upstairs heating.
I'm probably well aware of most of the issues, but there is always someone who knows more.
I'd be grateful if anyone has some meaningful advice. Thank-you.
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Comments

  • Financially, it makes more sense to rent it out. The area in South East London within the London Overground catchment area (Brockley, etc) saw a steady increase in anticipation of Crosstalk and then a very sharp increase after it opened (although prices in London are surging in general). The market has dropped significantly since the Brexit vote as well,
    so it's not a brilliant time to be selling. Woolwich is a growth area in general, and you'd be surprised how quickly that £320k valuation could become £420k. My first flat in Lewisham doubled in value between 2013 and 2015.

    In relation to your concerns about renting it out, generally speaking, better properties attract better tenants and it sounds like you're mum's place is quite dated, so it's likely that you would need to do some refurbishment in order to get it in the sort of condition where it would attract a good tenant.

    Ultimately comes down to whether or not you're prepared for the hassle and financial outlay required to get it in rentable condition.
  • My house and others round here went up by at least 10-15% overnight when they announced fast trains from Snodland. Cross rail has a similar effect I understand. I’d rent it and hold on - especially with the amount of investment in Woolwich at the moment
  • Not that I know about these things so feel free to totally ignore but I always got the impression that Govt/council support for a nursing home stay was means tested. If that was the case then having rental income or a large pot of cash might be an issue.
  • Tax system is very much against buy to let currently. House in need of a lot of work. But am I come stream is always helpful. Tough choice.
  • MrLargo said:

    Financially, it makes more sense to rent it out. The area in South East London
    so it's not a brilliant time to be selling. Woolwich is a growth area in general, and you'd be surprised how quickly that £320k valuation could become £420k. My first flat in Lewisham doubled in value between 2013 and 2015.

    In relation to your concerns about renting it out, generally speaking, better properties attract better tenants and it sounds like you're mum's place is quite dated, so it's likely that you would need to do some refurbishment in order to get it in the sort of condition where it would attract a good tenant.

    Ultimately comes down to whether or not you're prepared for the hassle and financial outlay required to get it in rentable condition.

    A refurb and then onto the rental market through a letting agent, if this doesn't work out then sell it on.
  • As long as you pick a reputable letting agent, problem tenants are usually weeded out. If they also manage the house they will do regular inspections. You will need buy to let insurance which covers major damage by tenants. You can also get insurance for non-payment of rent - all at a price of course.

    Get a couple of letting agents to visit the house with you and advise what minimum work needs doing to let it. I was worried the same as you pre letting but have had no major problems or any rent issues in last 5 years.
  • Even cleaning it up doesn't guarantee you're gonna get tenant who respects the place though. Mine was done to a good spec and rented okay for the first 12 months, but that's when the problems started to happen. The rent stopped, things started to be reported broken and when I eventually went in to check it over, the time, effort and money invested was basically a waste as it was wrecked. Then I had 6 years of only ever getting around 10 months a year rent, insurance claims to cover unpaid rent and to get people evicted, and the odd £300 to £400 bill for repairs.

    My advice from my experiences of being a (unintentional) landlord is - Unless you can spare the time for the potential hassle and stress, I'd cash in mate
  • Speaking from personal experience of renting out a second property we had. I’d say sell it and save the hassle, ours was a nightmare to the point where I had to pay our tennant £4K to move out when we finally decided to sell.....the law is absolutely shit when it comes to landlords etc.

    I’d never do it again
  • Rent it out CE
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  • Speaking from personal experience of renting out a second property we had. I’d say sell it and save the hassle, ours was a nightmare to the point where I had to pay our tennant £4K to move out when we finally decided to sell.....the law is absolutely shit when it comes to landlords etc.

    I’d never do it again

    Same as me mate, although I dindnt have to pay anyone to go. Once my last tenant done a runner, I paid what I could of the mortgage repayments each month from France and it lay empty for the 14 or so months it took to sell it. NRAM (the lender) were really good tbh
  • The law is totally weighted to the tennant.

    We were on the verge of losing a brilliant sale as the tennant just pissed about threatening to squat, we basically found her a new property and paid her first 4/5 months rent.....still makes me mad thinking back to it.
  • MrLargo said:

    Financially, it makes more sense to rent it out. The area in South East London within the London Overground catchment area (Brockley, etc) saw a steady increase in anticipation of Crosstalk and then a very sharp increase after it opened (although prices in London are surging in general). The market has dropped significantly since the Brexit vote as well,
    so it's not a brilliant time to be selling. Woolwich is a growth area in general, and you'd be surprised how quickly that £320k valuation could become £420k. My first flat in Lewisham doubled in value between 2013 and 2015.

    In relation to your concerns about renting it out, generally speaking, better properties attract better tenants and it sounds like you're mum's place is quite dated, so it's likely that you would need to do some refurbishment in order to get it in the sort of condition where it would attract a good tenant.

    Ultimately comes down to whether or not you're prepared for the hassle and financial outlay required to get it in rentable condition.

    If it was in an area where any localised property values had already boomed and peaked, then you might as well sell.

    But I think the key thing here is that Woolwich is a growth area right now, transport, amenities and the area progressively upgrading.
    Property values can only rise during the next couple of years as Woolwich becomes more sought after.


    What would I do? Same as Badger suggests, "A refurb and then onto the rental market through a letting agent, if this doesn't work out then sell it on".

  • Thanks all. It's pretty much a 50/50 decision, which was why I asked. Please carry on as some bright spark may come up with something else and I'm possibly not the only person that has or will have this dilemma.
  • Thanks all. It's pretty much a 50/50 decision, which was why I asked. Please carry on as some bright spark may come up with something else and I'm possibly not the only person that has or will have this dilemma.

    Your mil is still in her home CE?
  • Sell it. Tax laws against landlords is only going to get worse.
  • My great aunt is in a care home and we chose to rent the place rather than sell. We've got lucky so far though as the neighbour wanted to build a large outhouse kind of thing at the bottom of his garden and asked to rent her place just for access. It means the place is messy but he's minted so fully expect him to honour his word in cleaning it up (he also wants to buy the place at some point so doesn't want to get on the wrong side).
    In a few months it's back to making the decision of whether to rent out (in the conventional manner this time) or sell.

    My advice would simply be if you're overly worried about the risks of renting, then don't. Sell up and save the stress.
  • If you sell it, can you lend me a fiver
  • agree with Golfie
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  • Have a question of my own that someone may be able to help with...
    My great aunt has left me her property in the will. If it was sold while she is still alive, how would that affect things?
  • My ma in law is going into a nursing home and I'm weighing up the pros and cons of renting or selling her Woolwich, 3 bed end of terrace house.
    Woolwich prices have increased by 10% in the last year and Crossrail is due to open in Woolwich this December.
    Looking on t'net it could sell for £320K and rental income could be £1200pm.
    As a rough calculation if she receives Nhs Funded care of £158.16pw and her state pension is not reduced, it may be possible her cash could last 8 years. She is 90.
    One of my concerns with renting is people trashing the place, not paying, illegally sub letting and or squatters.
    The house is old fashioned with a hot air blowing system downstairs only and no upstairs heating.
    I'm probably well aware of most of the issues, but there is always someone who knows more.
    I'd be grateful if anyone has some meaningful advice. Thank-you.

    What say does she have about her house?
  • agree with Golfie

    What about what I said Lancs? That's pretty good ain't it?
  • Covered End. Just thinking out the box here. Why don’t you rent it out to a tradesman who come down to London Monday to Friday. Give them a big discount in rent but they have to update the house for you. If you get 3 blokes in it could make you more money once you come to sell in the future. Only an option. Thanks
  • I rented out my ground floor flat once and one day I got a call from the police. The tenant was caught standing by the window showing his old boy to two passing schoolgirls. He ended up in prison for something else, and for months afterwards I was getting loads of unpaid bills and final notices for him.
  • The richest people in the UK got there by owning property on this island - not selling it.
  • The richest people in the UK got there by owning property on this island - not selling it.

    but I expect the "rich" prople you are talking about own large properties in Chelsea, Surrey or on Sandbanks.....not a 3 bed semi that has no real central heating & is in SE London.

    to my mind the real issue is risk. holding £300k in one single asset class is not sensible be it property or cash deposits. If the property is no longer needed by the occupant & you are not looking to be a portfolio landlord then selling it & spreading the risk (as well as making it mire tax efficient) is surely the best answer.. .

    but as I say, don't take my word on it, ask your mate down the pub.....I'm sure he's more knowledgable about these things
  • edited June 16
    iainment said:

    My ma in law is going into a nursing home and I'm weighing up the pros and cons of renting or selling her Woolwich, 3 bed end of terrace house.
    Woolwich prices have increased by 10% in the last year and Crossrail is due to open in Woolwich this December.
    Looking on t'net it could sell for £320K and rental income could be £1200pm.
    As a rough calculation if she receives Nhs Funded care of £158.16pw and her state pension is not reduced, it may be possible her cash could last 8 years. She is 90.
    One of my concerns with renting is people trashing the place, not paying, illegally sub letting and or squatters.
    The house is old fashioned with a hot air blowing system downstairs only and no upstairs heating.
    I'm probably well aware of most of the issues, but there is always someone who knows more.
    I'd be grateful if anyone has some meaningful advice. Thank-you.

    What say does she have about her house?
    I'll advise her & she'll do as I suggest, as she has for the last 10 years since her husband died. (I'm a retired financial advisor).
    Unfortunately she is unable to make the simplest of decisions about anything.
  • I would rent for a year and then sell once cross rail opens
  • So roughly so far, rent 8 sell 6.
    Please carry on I'm finding this very interesting, thanks.
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