If you've got the readies to spend € £10 - 12k, maybe spend the next 12 months or so getting it done up, then stick it on the market once Cross Rail opens, as said above
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.
Fair enough. Unfortunately some people only see the pound signs when someone gets to this.
Greenwich has I think made the definition of 'house in multiple occupation' (HMO) quite tight these days - if you rent to what constitutes 2 or more families - a couple and a friend, or three single people - you have to have quite stringent fire safety in place (and other things - it's quite a long compliance list), as well as pay an annual licensing fee to RBG.
In addition, you are responsible under 'right to rent' to check that the tenant(s) are legitimately in the country - if not, it's you that is fined/prison sentence, and the tax rules have changed adversely for landlords so you'll probably pay quite a lot of the rent over to HMRC.
If you do decide to rent, I'd suggest joining something like the National Landlord's Association, which gives you helplines for legal and tax advice in with the membership, as well as templates for contracts etc.
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.
Fair enough. Unfortunately some people only see the pound signs when someone gets to this.
If she survives 2/3 years all her cash may/will be gone, depending on whether she receives Nhs FNC (funded nursing care) in which case it may last longer. The rental or sale income will need to fund her when the cash is gone.
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
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.
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
Whats your problem golf?
Nothing......just that I would guess that most of the people posting replies have never either A) rented a 2nd property out or been in a position to have £320k to fund a relatives care fees.
Based on my parents experiences of choosing whether to sell or rent a place when moving on and then later buying a buy to let place, and my experiences of helping to manage one of the properties.
I would say rent it. The one time my parents chose to sell rather than to rent my old man calls it the worst decision of his life (he is an accountant and anal about all these things - does a bank reconciliation of his personal finances each month). The property was looking pretty run down about 8 year later but the value had doubled. He regrets it a huge amount.
The 2 places they have had as buy to let - before the recent tax rules changed - have been pretty successful. You are aware of the risks which I would say is the main thing. Some have advocated getting a letting agent to manage the property and see the benefits of this. Personally I would weigh this up against the alternative of self managing. Yes it's a lot of effort and time but if you are fairly local to it then it may not be too bad. For us self managing has meant we have been able to meet prospective tenants and almost screen them. You can choose who you are renting to and over time build a relationship with them. This for us has worked a lot better than using a letting agent who in our experience are out to do as little work as possible for their fee - they don't bother screening prospective tenants or visiting the property or anything like that. Once they have their fee their happy and anything else is your problem.
Would pay you slightly less rent but take the hassle away from you; quality of tenant may not be great but if the house is not in the best condition then maybe ideal?
my last word on the subject. If you need to rely on the income for the care fees then would it not be sensible for the income to be guaranteed or at least safe, rather than based on a tenant having to pay you every month What happens when they don't & it takes 6 months to evict them.....have you got the money to cover this, as well as court costs & any money that may be needed to do it up before re-letting ??
Agree with self-managing if you do decide to rent - get an estate agent to advertise the property, do the income checks, the right-to-rent checks, put the deposit in a secure place for you, and then just charge you the finders-fee, which is usually 1 month rent plus charges for the deposit insurance and financial checks all plus VAT. This does give you a little more reassurance than just getting someone you've found to rent it, but you're not paying the monthly fee to them as 'managing agents' - if you cost up your own time, and compare it to the managing agent fee, you will probably wonder what they are doing for the money.
Either way, from what you said, the place will need a bit of 'modernising.' Do the necessary there and look at the sales and rental markets again in 2-3 months or however long the work takes.
Most tenants are fine it's just the odd one that isn't. From experience my top tips are:
Always meet your tenants personally. If you use an agent tell them you want final say on who you rent to.
Take white collar workers only - no self employed.
No housing benefit people (you can have rent paid directly to you, but if the tenant fraudulently claims the council come after you not the tenant)
Take rent insurance for the first 6 months then take a view on the calibre of tenant.
If they don't pay their rent, then immediately issue a section 21 notice to reclaim the property and write off the money. No hard luck stories. Don't bother taking them to court to get them evicted for non payment since the courts are massively biased in favour of the tenant.
When anything goes wrong get it fixed asap.
Put 10-15% of rental income aside in case stuff needs fixing or it's empty.
Apologies if others have mentioned this stuff already I've not read all the posts.
So roughly so far, rent 8 sell 6. Please carry on I'm finding this very interesting, thanks.
Definitely rent, CE.
As I posted early on and others have agreed, if you do this via a letting agent who guarantees a prescribed monthly income whether the property is rented or empty, you really can't lose. We used one in Dartford in case you want to contact them....If you message me, I'll gladly give you their details.
You may need to do some basic updating but get advice from the agent as to the minimum they'd expect before putting it on their books. We installed a new bath/loo/sink in MIL's but such fitments are pretty cheap these days. And replacing white goods such as washing machine & fridge aren't expensive.
We had to obtain a Corgi gas certificate for a gas fire in the lounge, but again, speculate to accumulate at a later date.
Any updating you do will also stand you in good stead once your MIL has passed and you want to sell.
The value of the property in that area can only rise and the good lady's nearest & dearest will have a legacy to remember her by which I'm sure she would want.
my last word on the subject. If you need to rely on the income for the care fees then would it not be sensible for the income to be guaranteed or at least safe, rather than based on a tenant having to pay you every month What happens when they don't & it takes 6 months to evict them.....have you got the money to cover this, as well as court costs & any money that may be needed to do it up before re-letting ??
Rent it out but make sure you get yourself some rent guarantee insurance. My first tenants stopped paying and i was able to claim almost all of it back. Since then my new tenants have be great but always get the insurance.
I would sell, it doesn't sound an ideal place to rent, would you get an electrical/gas safety certificate? Possibility of issues with tenants, house needing repairs/work etc.
Sell. Can you really be bothered with all that hassle? No heating upstairs, that will have to be fixed. Does your wife have any other siblings?
We bought in the area 6 years ago. The Crossrail effect in prices has already happened. I cant see it going up much more. Be great if they did from a very selfish perspective but cant see it. What road is it?
What are you going to do if it finishes as a draw?
I don't want a load of grief, so I'm more inclined to sell, especially if Woolwich house prices have peaked. But have they ?
Well, a property is only worth what someone is prepared to pay for it. You could check on-line (Zoopla or whatever) and perhaps it'll show if prices are upwardly moving in that street/area, or not?
Also check out various local estate agents (again on-line or even a visit for a chat) for price movement - often you'll also find that different agents can vary in their valuations.
A little bit of research might be enough for you to decide whether to rent or sell now. Anyway, best of luck!
What are you going to do if it finishes as a draw?
I don't want a load of grief, so I'm more inclined to sell, especially if Woolwich house prices have peaked. But have they ?
Well, a property is only worth what someone is prepared to pay for it. You could check on-line (Zoopla or whatever) and perhaps it'll show if prices are upwardly moving in that street/area, or not?
Also check out various local estate agents (again on-line or even a visit for a chat) for price movement - often you'll also find that different agents can vary in their valuations.
A little bit of research might be enough for you to decide whether to rent or sell now. Anyway, best of luck!
I have been and will be doing all that. Prices have gone up @ 10% in the last year, more than most of SE London. But where are they going next year and the years after ?
Comments
€£10 - 12k, maybe spend the next 12 months or so getting it done up, then stick it on the market once Cross Rail opens, as said aboveIn addition, you are responsible under 'right to rent' to check that the tenant(s) are legitimately in the country - if not, it's you that is fined/prison sentence, and the tax rules have changed adversely for landlords so you'll probably pay quite a lot of the rent over to HMRC.
If you do decide to rent, I'd suggest joining something like the National Landlord's Association, which gives you helplines for legal and tax advice in with the membership, as well as templates for contracts etc.
The rental or sale income will need to fund her when the cash is gone.
I would say rent it. The one time my parents chose to sell rather than to rent my old man calls it the worst decision of his life (he is an accountant and anal about all these things - does a bank reconciliation of his personal finances each month). The property was looking pretty run down about 8 year later but the value had doubled. He regrets it a huge amount.
The 2 places they have had as buy to let - before the recent tax rules changed - have been pretty successful. You are aware of the risks which I would say is the main thing. Some have advocated getting a letting agent to manage the property and see the benefits of this. Personally I would weigh this up against the alternative of self managing. Yes it's a lot of effort and time but if you are fairly local to it then it may not be too bad. For us self managing has meant we have been able to meet prospective tenants and almost screen them. You can choose who you are renting to and over time build a relationship with them. This for us has worked a lot better than using a letting agent who in our experience are out to do as little work as possible for their fee - they don't bother screening prospective tenants or visiting the property or anything like that. Once they have their fee their happy and anything else is your problem.
http://www.lettinginternational.com
Would pay you slightly less rent but take the hassle away from you; quality of tenant may not be great but if the house is not in the best condition then maybe ideal?
Either way, from what you said, the place will need a bit of 'modernising.' Do the necessary there and look at the sales and rental markets again in 2-3 months or however long the work takes.
Most tenants are fine it's just the odd one that isn't. From experience my top tips are:
Always meet your tenants personally. If you use an agent tell them you want final say on who you rent to.
Take white collar workers only - no self employed.
No housing benefit people (you can have rent paid directly to you, but if the tenant fraudulently claims the council come after you not the tenant)
Take rent insurance for the first 6 months then take a view on the calibre of tenant.
If they don't pay their rent, then immediately issue a section 21 notice to reclaim the property and write off the money. No hard luck stories. Don't bother taking them to court to get them evicted for non payment since the courts are massively biased in favour of the tenant.
When anything goes wrong get it fixed asap.
Put 10-15% of rental income aside in case stuff needs fixing or it's empty.
Apologies if others have mentioned this stuff already I've not read all the posts.
Has anyone used them ?
As I posted early on and others have agreed, if you do this via a letting agent who guarantees a prescribed monthly income whether the property is rented or empty, you really can't lose. We used one in Dartford in case you want to contact them....If you message me, I'll gladly give you their details.
You may need to do some basic updating but get advice from the agent as to the minimum they'd expect before putting it on their books. We installed a new bath/loo/sink in MIL's but such fitments are pretty cheap these days. And replacing white goods such as washing machine & fridge aren't expensive.
We had to obtain a Corgi gas certificate for a gas fire in the lounge, but again, speculate to accumulate at a later date.
Any updating you do will also stand you in good stead once your MIL has passed and you want to sell.
The value of the property in that area can only rise and the good lady's nearest & dearest will have a legacy to remember her by which I'm sure she would want.
It's a risk you don't need, sell it.
We bought in the area 6 years ago. The Crossrail effect in prices has already happened. I cant see it going up much more. Be great if they did from a very selfish perspective but cant see it. What road is it?
It's near the Wine Church and ferry. I'll inbox you the road.
It's roughly 11 rent 8 sell.
But have they ?
You could check on-line (Zoopla or whatever) and perhaps it'll show if prices are upwardly moving in that street/area, or not?
Also check out various local estate agents (again on-line or even a visit for a chat) for price movement - often you'll also find that different agents can vary in their valuations.
A little bit of research might be enough for you to decide whether to rent or sell now.
Anyway, best of luck!
But where are they going next year and the years after ?