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Renting property

sunshine70

Registered User
Jan 17, 2021
21
0
Hi. I've spent the last year reading many of the threads raised on here, and today decided to join your gang! I've learned lots and have also realised I am not the only one needing help to make sense of this illness.
My 80 year old mum went into a care home a year ago, she has vascular dementia. Her house is sitting empty and we are wondering what to do with it. I've read some old posts about for's and against's of renting, but would like to know if someone has recently gone down this route?
Which of her benefits would she lose, she gets Attendance Allowance and Pension Credit (I think), all sorted and managed by my sister. We have the top-up amount of her care already deferred against the house. I know we would have to inform the council of our intention to rent, what will they change regarding the benefits she gets? Will she pay tax of all of the rent as it's classed as unearned income?
The house is quite large and an agent has already said HMO would give us the best return. I'm hoping that this will give us funds for as long as they're needed. I know people who have HMO's and they say the positives outweigh the negatives but my concern is how it will work for mum financially. All maintenance will be done by family members (we can cover all trades).
If we go down the selling route what investment will give us the return we need and what happens when the money runs out?
If anyone can help answer my questions about finances I'll be happy.
 

MaNaAk

Registered User
Jun 19, 2016
3,685
0
Essex
Dear Sunshine70 (love the name),

Welcome. I'm not an expert on this but I don't see how renting your mum's home would affect her Attendance Allowance as it is not a means tested benefit although you could check whether she needs the lower or higher level. If she needs care at night then she should be on the higher level. Just one thing though can anyone else who is reading this advice @sunshine70 about council tax?

MaNaAk
 

Bikerbeth

Registered User
Feb 11, 2019
1,809
0
Bedford
We decided to go the rental route at the end of last year. For us the rental return (we have gone fully managed) gave a better return than going for an investment return in the current climate. Our intention then is to use Mum’s private pensions and the rent (after tax) plus some of her savings to pay care home fees. Attendance allowance is not affected. However Mum does not get any other benefits so I am not sure how that works. A tax return would need to be completed on behalf of your Mum even if there would be no tax to pay. Would it be worth getting a ‘free’ hour with an accountant or an Independant Financial Advisor. Obviously you won’t get all the answer based on ‘free’ but it might give you a steer. Also remember other costs such as the Landlords Gas Certificate, Electrical certificate. If not using an estate agents how are you going to check references and other requirements etc.
I hope that helps a little.
 

Louise7

Volunteer Host
Mar 25, 2016
2,889
0
Hello @sunshine70 welcome to the forum. You mention that there is already a deferred payment agreement in place. We had one too and I suggest that you check the wording of the agreement document/contract with regards to renting out the property. Agreements do vary dependant on the local authority but our agreement stated that we would need to obtain the permission of the local authority prior to renting the property, and that rental income would need to be paid to the local authority, thereby reducing the amount that they would need to pay towards the care home fees and 'defer' against the property. If your deferred agreement states similar then it's worth contacting the local authority first to see if they will actually allow the property to be rented out, and as 'multiple occupancies', before taking any further action.
 

sunshine70

Registered User
Jan 17, 2021
21
0
Thank you for your replies. I'll go and investigate further.......and may come back with more questions. xx
 

Bod

Registered User
Aug 30, 2013
1,390
0
If you are going for HMO, house of multiple occupation, beware that there are many more regulations that have to be fulfilled before any tenants are housed.
Dependant on the property, these regulations won't be cheap to meet.

Bod
 

Old Flopsy

Registered User
Sep 12, 2019
43
0
Tax advice can be provided free by Tax Help for Older People (TOP). I was a tax professional but I also did voluntary work for TOP for many years and completed many Tax Returns for older people who could not afford professional services. I used to visit clients in their own homes if they were unable to travel to the tax surgeries held in Age UK offices.
 

MartinWL

Registered User
Jun 12, 2020
675
0
If you are going for HMO, house of multiple occupation, beware that there are many more regulations that have to be fulfilled before any tenants are housed.
Dependant on the property, these regulations won't be cheap to meet.

Bod
What @Bod says is absolutely right. Also do not underestimate the amount of work a landlord has to do. If you ask an agent to manage all maintenance it will take a larger slice of the rent than if you manage it yourself, they have little incentive to get the best deal for you and will probably take commission on any work done. If you are managing the maintenance you might find that there is plenty to do. A HMO also comes with risks of problem tenants or conflict between tenants. Do not get the idea that you can sit back and watch the cash rolling in, it is not like that.
 

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