Renting mums house out

[Suzysheep01]

Hi,
mum has moved into a care home 3 weeks ago.
myself and my sibling have LPA. I am wondering if it’s a complete nightmare to rent out a property or just sell it?
it would need a bit of work doing to modernise the kitchen and a new front door, and we would probably leave it furnished.
has anyone got any experience of this?
i just think it’s a shame that she’s paying care home fees and council tax, water rates etc ..
any advice would be appreciated!

 

[SAP]

If your mum is no longer living there, contact the local authority as she should not be paying council tax.

Council Tax exemptions | Advice | Independent Living

<p>Many people could save on council tax We are probably all aware of the discount provided on council tax for single person households, but there are a surprising number of other exemptions and discounts you might be eligible for. This is a roundup of those mainly applicable to carers and...

www.independentliving.co.uk

 

[Jaded'n'faded]

Swings and roundabouts! Renting a house is all very well in principle but can bring a lot of problems - bad tenants, damage to the property, unpaid rent, etc. And there are certain safety things you'd need to sort out before you could rent it. Then there's the income - would it be sufficient to pay or partly pay her care fees after you've taken into account all your costs, maintenance of the property, etc, etc??

It can work - many TP members have done so successfully but others find that selling the house gives them one less thing to worry about. Hopefully others will be along to offer their experiences...

 

[My Mum's Daughter]

Now that your Mum is a care, she should be exempt from council tax. Please contact your local council about this.

You need to factor in that your Mum will be paying tax on the rental income. Will her income plus the rent cover her care home fees for the foreseeable future? We thought about renting out Mum's but having done the sums, we realised that sooner or later, we'd have to evict the tenants and sell the property. I can certainly do without that stress.

 

[sdmhred]

Hi @Suzysheep01
We’ve been doing this for the past 18 months as my dad left mum with rental property to manage. When it’s smooth it’s great and good income for mum. It is very time consuming however and having had a few problems recently we’re thinking of stopping. I think my recommendation would be dependant on the time you have to organise it and your access to local tradespeople when things go wrong and needing fixed. You can ask an agent to manage on your behalf but that does take away quite a bit of the income.

 

[Violet Jane]

We rented out my mother’s house. You have to do everything properly otherwise you risk being in breach of safety legislation and not being able to get the tenants out when you want to sell.

The first thing I would do is contact an estate agent and find out how likely you are rent it out and to whom, what rent you are likely to receive minus agent’s fees and what works need to be done to make it rentable and to comply with the relevant legislation. You will then know whether the hassle and the costs are worthwhile. Bear in mind that if you let to a group of people eg students or unrelated adults you may have to get a licence from the local authority.

You will also need to think about who will deal with repairs and things going wrong in the house. This will be difficult if you are not local.

 

[nitram]

Assuming the house in its present state would sell for £x, If your mum did not own the house and had £x to invest would you buy the house or invest elsewhere?

 

[Zebra123]

Hi, suzysheep01. It is probably difficult for you at the moment to readjust to your mother being in a care home. Hope you're coping all OK. Seven years ago my mother went into a care home and after allowing a few months to prepare myself to emptying her house I decided to rent it out to help with the fees. Luckily the first tenant was my niece. However I am now on my 4th tenants [moved on, moved into their partners place, bought their own place etc]. I use a local estate agent to draw up the tenancy rental agreement and deal with the Tenancy Deposit scheme but my husband and I deal with any day to day issues with the property - it's 50 years old]. I hear horror stories about renting out property - it depends where you live. Sorry to say this, but some areas are better then others. I've used the estate agent twice to source new tenants - they should be able to give you honest, decent tenants. From a financial point of view - guaranteed monthly income beats the meagre interest you would get from investing the money received from selling the house. I live 10 minutes away from mum's house [I still call it that despite her having passed away 2 years ago and it's my house now]. At the end of the day it really depends on how you feel about things. Are you local to the property? How long will it take for you into get to the £23,500 asset level when you will then get local authority help for some [but not all] of the care fees. I wish you a lot of love in sorting this out. Regards Christine

 

[Bunpoots]

Hi @Suzysheep01

I rent out several properties and use an agent with whom I have a good relationship. I didn’t want the hassle of dealing with tenants although I often arrange for repairs myself and do the decorating and some smaller repairs. (I’m a carpenter’s daughter)

The first thing I would do is speak to an estate agent who both sells and rents. You say some work needs doing so get an EPC - you need one wether you choose to sell or rent but to rent to new tenants it has to be E or above (soon to be C or above) then you can decide which is best.

I’ve been in the rental market for 8 years now and, although a property usually needs cleaning and sometimes painting between tenants, I’ve only had one case of a property being left in a disgusting state. The tenant lost her deposit for the repairs and cleaning costs, but she didn’t contest it.

I rented my dad’s bungalow out for a while to help with his care costs. It’s best, in my experience, to rent unfurnished as most tenants will have their own furniture.

I supply a cooker and in one property an integrated dishwasher and fridge freezer - but only because they came with the property when I bought it. When I eventually replace the kitchen it will just be a cooker.

I hope this helps.

 

[Suzysheep01]

Thanks for all your replies. It’s given me a lot to think about.
I’m not planning on doing anything for a while… it’s very early days and I need to get mum settled for now.
the one thing that puts me off is the thought of bad tenants who may trash the place. That would be heartbreaking.

 

[Brizzle]

Hi, suzysheep01. It is probably difficult for you at the moment to readjust to your mother being in a care home. Hope you're coping all OK. Seven years ago my mother went into a care home and after allowing a few months to prepare myself to emptying her house I decided to rent it out to help with the fees. Luckily the first tenant was my niece. However I am now on my 4th tenants [moved on, moved into their partners place, bought their own place etc]. I use a local estate agent to draw up the tenancy rental agreement and deal with the Tenancy Deposit scheme but my husband and I deal with any day to day issues with the property - it's 50 years old]. I hear horror stories about renting out property - it depends where you live. Sorry to say this, but some areas are better then others. I've used the estate agent twice to source new tenants - they should be able to give you honest, decent tenants. From a financial point of view - guaranteed monthly income beats the meagre interest you would get from investing the money received from selling the house. I live 10 minutes away from mum's house [I still call it that despite her having passed away 2 years ago and it's my house now]. At the end of the day it really depends on how you feel about things. Are you local to the property? How long will it take for you into get to the £23,500 asset level when you will then get local authority help for some [but not all] of the care fees. I wish you a lot of love in sorting this out. Regards Christine

Interest rates now are rising. BOE is expected to raise further in early Feb although this does not automatically mean savings rates will continue to rise . There are some fixed rate deals right now for 1-3 years that will pay 4% plus, I believe up to around 4.5 % .Therefore on a house that sells (for demonstration purposes only but any sell price and interest earned will be comparative to relative rental value) at £500,000 you can earn around £22,500 per annum pre tax. Depending on your area what could you realistically hope to get in rental income as opposed to savings income.? Both will be subject to tax , but renting can have its problems and stress as opposed to savings . Better to spread higher amounts of savings across several banks or savings institutions so you have the security of the £85,000 protection guarantee to your full individual investments . I speak from experience having rented my own property out while overseas , some tenants are much better than others shall we say. Short term consensus is house prices will continue to fall due to current world events and consequential rising mortgage and cost of living rates. If interest rates were still at 1% or less it would be a no brainer, but right now I am not so sure. It’s that crystal ball scenario , I wish the OP all the best what ever they decide.

 

[canary]

I briefly considered renting mums property, but she didnt have much in savings - almost everything she had in assets was in her home - and the amount we would get in rent would no way cover the care home home fees.

 

[SweetPepper]

I’m in the process of selling my mum’s now. My primary reason for sale as opposed to renting is that it is an old granite rubble cottage and needs constant upkeep. If she’d been in a low maintenance property I would probably have kept it.

 

[Suzysheep01]

Interest rates now are rising. BOE is expected to raise further in early Feb although this does not automatically mean savings rates will continue to rise . There are some fixed rate deals right now for 1-3 years that will pay 4% plus, I believe up to around 4.5 % .Therefore on a house that sells (for demonstration purposes only but any sell price and interest earned will be comparative to relative rental value) at £500,000 you can earn around £22,500 per annum pre tax. Depending on your area what could you realistically hope to get in rental income as opposed to savings income.? Both will be subject to tax , but renting can have its problems and stress as opposed to savings . Better to spread higher amounts of savings across several banks or savings institutions so you have the security of the £85,000 protection guarantee to your full individual investments . I speak from experience having rented my own property out while overseas , some tenants are much better than others shall we say. Short term consensus is house prices will continue to fall due to current world events and consequential rising mortgage and cost of living rates. If interest rates were still at 1% or less it would be a no brainer, but right now I am not so sure. It’s that crystal ball scenario , I wish the OP all the best what ever they decide.

Thanks for that perspective…. Obviously when you put it that way it’s a no brainier! But….. it’s been our family home for 55 years and my sibling has expressed she maybe wants to buy it in the future ( they are LPA with me, and obviously a beneficiary of the will which makes buying it a really complicated process due to multiple conflicts of interest) leaving it empty seems such a waste though.

 

[nitram]

Does your mum have assets, other than the house, over the upper limit ?
When these are below this limit the LA will expect the house to be sold to fund care unless a deferred payment agreement is set up.
Houses with a DPA can be rented out.

 

[Suzysheep01]

Does your mum have assets, other than the house, over the upper limit ?
When these are below this limit the LA will expect the house to be sold to fund care unless a deferred payment agreement is set up.
Houses with a DPA can be rented out.

yes she does. She has about 3 years of funding for care in her savings. We have just started the process of application for CHC and are really hoping to secure that for her.