What to Do With an Inherited Property

Misty moo

Need help with what to do? I have my own home and also was left another house and I'm torn between renting it out or selling it... I'm in Midlands... I had an auctioneer out today to view and he advised me to sell, as a accidental landlord as he called me what I get a month I would pay roughly half in tax plus property tax, insurance, water, upkeep etc, he said landlords have no rights, if you have a tenant that doesn't pay or they are not working out it could take up to a year to vacate them with a lot of hassle and costs.. On the other hand if I sell the money would be gone updating my own property and constantly picking at it and then it's gone.. I was wondering was anyone in a similar circumstances and wished they had rented out or sold or visa versa... Thanks

Heres Johnny

The estate agent may have a vested interest in you selling but I actually agree with everything he said. I'd be selling myself. Use the proceeds to allow you invest more of your income into a pension fund preferably or if not then some other investment. Unless you're a professional, I'd warn anyone away from property.

DubCount

I think the question you have to answer is - if you inherited cash in stead of the property, would you choose to purchase a property and become a landlord? Many accidental landlords become landlords as they don't have another option. You have options. You could boost your pension or make more diverse investments in stead of starting a letting business. Consider what makes most sense to you, and choose to be a landlord only if that's what suits you best.

Larbre34

I'm guessing from the way you put it that you are not a child of the late owner of the property. That being the case, the tax liability could be quite high relative to the value of the property and it will need to be settled by the end of the year. Once you get that tax amount confirmed, unless you have significant deposits, selling may be the only option regardless.

Samuel T. Cogley

Also agree the EA is telling you the truth in regards to the pitfalls of renting it out.

TCM

If you retain the asset you'll get a rental yield and the property value will appreciate over time. Choose carefully who you rent to & you shouldn't have any problems. Ok a bit of work is involved but it will be worth it. I don't understand why the auctioneer is so keen to get you to sell it other than he is keen to make a tidy sum on the sale.

amcalester

TCM wrote: »

If you retain the asset you'll get a rental yield and the property value will appreciate over time. Choose carefully who you rent to & you shouldn't have any problems. Ok a bit of work is involved but it will be worth it. I don't understand why the auctioneer is so keen to get you to sell it other than he is keen to make a tidy sum on the sale.

Unfortunately regardless of how well the Op picks his tenants, the government are actively trying to force this type of landlord out of the market and he may find that future legislative changes leave him with a devalued asset as a result.

the_syco

If the tenants lost their jobs, you'll have to upgrade your house so that it's up to whatever HAP standards are in place that year.

How much do you think that'd set you back?

gctest50

Misty moo wrote: »

Need help with what to do? I have my own home and also was left another house and I'm torn between renting it out or selling it... I'm in Midlands... I had an auctioneer out today to view and he advised me to sell, as a accidental landlord as he called me what I get a month I would pay roughly half in tax plus property tax, insurance, water, upkeep etc, he said landlords have no rights, if you have a tenant that doesn't pay or they are not working out it could take up to a year to vacate them with a lot of hassle and costs.. On the other hand if I sell the money would be gone updating my own property and constantly picking at it and then it's gone.. I was wondering was anyone in a similar circumstances and wished they had rented out or sold or visa versa... Thanks

Don't sell

Eg. you could do this :

https://www.housingagency.ie/housing-information/do-you-have-a-property-to-let.aspx

the_syco

gctest50 wrote: »

Don't sell

Eg. you could do this :

https://www.housingagency.ie/housing-information/do-you-have-a-property-to-let.aspx

They'll need to input a couple of thousand updating the property.

Also, if they rent it, and then sell it, they'll have to pay a lot more CGT.

Baby01032012

Renting it out will have no impact on CGT as it was not the OPs PPR to begin with. Yes they will pay CGT anyway now on inheritance depending on relationship to disposer but further CGT or not will depend on whether value goes up or down.

You have to look at it as an investment OP. What yield can you get ie rental income less repairs lpt income tax as a percentage of the value versus return if you sold and invested money elsewhere.

Estate agent in this case has given you solid advice. All that he has said about being a landlord is true.

JustMe,K

Look at all of the threads here from landlords and use that to help make up your mind.

Cryptopagan

Misty moo wrote: »

he said landlords have no rights, if you have a tenant that doesn't pay or they are not working out it could take up to a year to vacate them with a lot of hassle and costs..

That's very unlikely to happen. Personally, I would sell though. Could you open an investment account or something, so you wouldn't just spend the money?

mikemac2

Maybe the estate agent is dead on with their advice or maybe not but consider they also want the house on their books

If you decide to sell you don't have to go to that agent, shop around

amcalester

Cryptopagan wrote: »

That's very unlikely to happen. Personally, I would sell though. Could you open an investment account or something, so you wouldn't just spend the money?

While it the grand scheme of things it is unlikely to happen, it's also the mostly likely.

Rent arrears and/or overholding accounted for 23% of disputes lodged with the RTB in 2017.

Rent arrears/Rent arrears and overholding was the single biggest cause of disputes (16%), there's also just an overholding category (7%) bringing the combined total up to 23%

Cryptopagan

amcalester wrote: »

While it the grand scheme of things it is unlikely to happen, it's also the mostly likely.

Rent arrears and/or overholding accounted for 23% of disputes lodged with the RTB in 2017.

Rent arrears/Rent arrears and overholding was the single biggest cause of disputes (16%), there's also just an overholding category (7%) bringing the combined total up to 23%

To put those percentages in perspective:

There were 1,547 cases of Rent Arrears / Rent arrears & Overholding and 738 cases of Overholding, arising from 339,447 registered tenancies. So less than 1% of registered tenancies in 2017 were involved in disputes for rent arrears / overholding before the RTB.

https://onestopshop.rtb.ie/images/uploads/Comms%20and%20Research/RTB_Annual_Report_2017.pdf

pc7

I give my vote to sell, if you were in a large city which will likely always have high demand then I'd say consider keeping it. But as its in the midlands, I'd sell, put some money away for a rainy day and use the rest to pay down your mortgage or do up your property. Honestly the hassle and stress of being a landlord just isn't worth the risk, you could end up with an asset that is costing you money (repairs, insurance, non payment of rent etc.)

DubCount

Cryptopagan wrote: »

To put those percentages in perspective:

There were 1,547 cases of Rent Arrears / Rent arrears & Overholding and 738 cases of Overholding, arising from 339,447 registered tenancies. So less than 1% of registered tenancies in 2017 were involved in disputes for rent arrears / overholding before the RTB.

https://onestopshop.rtb.ie/images/uploads/Comms%20and%20Research/RTB_Annual_Report_2017.pdf

To put those stats in proper context, those are the annual stats for RTB complaints. If you are landlord for 20 years, this implies you have a 1 in 5 chance in getting stung at some point over your landlord career. Those stats also dont take account of cases which never make it to the RTB such as damage above the deposit level when a tenant has left and cant be traced.

IMHO it is madness to allow any tenant to stay in a property without paying rent for prolonged periods without any recourse or sanction. It is killing the rental market, and for all those paying high rents and finding it hard to find a rental property - your are paying for the behavior of non-paying tenants.

Cryptopagan

DubCount wrote: »

To put those stats in proper context, those are the annual stats for RTB complaints. If you are landlord for 20 years, this implies you have a 1 in 5 chance in getting stung at some point over your landlord career. Those stats also dont take account of cases which never make it to the RTB such as damage above the deposit level when a tenant has left and cant be traced.

How do you manage to get from having a 0.6% chance of something happening to you in a given year, to a 20% chance of it happening to you over 20 years?


Deposits and damage having nothing to do with overholding or nonpayment.

Fol20

The ea as others have pointed out has vested interests in this.

Im a ll however it isnt for the faint hearted. You need to have a cushion of say 6-12months rent to protect yourself from repairs and or tenant issues. Ll have very little rights and in your case, if you did decide to keep it, unless you have construction contacts and are comfortable putting in the hours to understand the legislation. You would need to hand it off to an ea who will take a cut of circa 6-10pc(in your case more than likely 10pc) this coupled with maintenance costs and tax would make me think if its worth it in your case.

It can be useful as another form of pension in 20-30years however you might have a lot of heartache in between. Personally unless you enjoy managing property and or having more than 1. It makes more sense to sell it and keep life simple. Once sold. I wouldnt use the money and dip into it as it will deplete over time. Instead you could talk to a financial advisor and potentially invest it in diversified portfolio of equities etc. This would be more liquid in case you need it at some point, it should hopefully give you a compound interest of 3pc(maybe more) over the long haul and just so you feel like your doing something. Every year with your dividend income, you could maybe spend that while not dipping into the principle. One important thing to note is shares can increase and decrease but over the long haul, it normally increases.

DubCount

Cryptopagan wrote: »

How do you manage to get from having a 0.6% chance of something happening to you in a given year, to a 20% chance of it happening to you over 20 years?


Deposits and damage having nothing to do with overholding or nonpayment.

My point was that a 1% chance of an event happening in a given year, is not the same thing as a 1% chance of an event happening over the course of a period longer than 1 year. Property Letting is a long term business and a Landlord can expect to be letting a property over many years. If there is a 1% chance of getting stung each year, the chances of getting stung over a longer period is higher. I did not want someone inferring that there is a 1% chance of this ever happening to them, when the chances over a Landlords career are much higher.

I agree damage has nothing to do with overholding. My point here is that not all losses suffered by landlords ever get to appear in RTB stats.

If an individual can afford the risks and is prepared to accept them for the return they receive, then go for it. Personally, I have moved to other forms of investment as the risk/reward caculation just didnt work for me.

the_syco

Misty moo wrote: »

I'm in Midlands...

How hard is it for you to get tradesmen to fix issues? The tenant will want it done immediately, but realistically you may be waiting a week before one will come out to you. If you can even get one.

Misty moo

Thanks for the feed back, I have no knowledge In what it take to become a landlord and the more I read and hear the more I think I will sell, what you are saying is very sensible, thanks

Misty moo

Thanks for that, there doesn't seem to be any positives on becoming a landlord

Misty moo

What other type of investments would you recommend? Thanks