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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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.
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.
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
I’d never do it again
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.
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".
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.
Also, there is no guarantee that house prices are going to increase....esp not at the rate some people on here think. Remember, the £320k can be invested to give you a decent return & spread around different asset & risk classess.....rather than having your big egg in just one rather precarious basket....as well as being more tax efficient & maybe even free from Inheritance tax if she survives the next 7 years.
but what do I know.....I'm only a financial advisor.
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?
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
Unfortunately she is unable to make the simplest of decisions about anything.
Please carry on I'm finding this very interesting, thanks.