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hoddoi

Sell Or Rent

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Hi - was wondering if anyone could give me a bit of advice on a discussion i'm having with my family:

A couple of years ago my aunt died and left me and my sisters a 100 year old detached 5 bedroomed house in a small coastal town in north wales. The property is in a reasonable condition, but needs some maintenance / updating work. My mum wants to keep it as its an old family home but my sisters want to sell the property as they can't be bothered with it and want money to buy their own houses (tho i think they could just about buy without selling this place). In my opinion with a bit of investment i think it could make a decent place for holiday rentals, its in a great location for snowdonia etc.. and there's room for about 8 people (or perhaps 10 - 12 maxed out) with parking for 3 or 4 cars. Is this a practical idea or should i just go with my sisters, i.e. is it a good time to sell and cash in.

Thanks

hoddoi

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Hi - was wondering if anyone could give me a bit of advice on a discussion i'm having with my family:

A couple of years ago my aunt died and left me and my sisters a 100 year old detached 5 bedroomed house in a small coastal town in north wales. The property is in a reasonable condition, but needs some maintenance / updating work. My mum wants to keep it as its an old family home but my sisters want to sell the property as they can't be bothered with it and want money to buy their own houses (tho i think they could just about buy without selling this place). In my opinion with a bit of investment i think it could make a decent place for holiday rentals, its in a great location for snowdonia etc.. and there's room for about 8 people (or perhaps 10 - 12 maxed out) with parking for 3 or 4 cars. Is this a practical idea or should i just go with my sisters, i.e. is it a good time to sell and cash in.

Thanks

hoddoi

It sounds a bit to much of a family issue to decide on this forum. I am, however, as a native of North Wales, inclind to agree with your sisters. HP in N Wales are very high in comparison to previous years and therefore, I think you would get a good return by selling, you just need to be realistic about the price (difficult with multiple ownership). My Dad put his house on the market (in N Wales) when he got divorced for £330,000 and soon realised that no one could afford it (ended up selling it for about £80,000 less), if he had put it on the market at a price people could afford from the start, he would have sold it quicker and probably for a bit more money.

However, your Mum may have a point, is the coastal town it's located in popular with tourists? If so, it may be worth using it for holiday lettings, although this could be alot of work (or expensive employing someone to look after it).

But ultimately, the main issue is that the house is owned by so many people, no doubt all with different opinions of which is the best way forward. Maybe you should do some research on each option and then all sit down for a 'meeting'. Good Luck, I don't envy you.

LG

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Hi there - thanks for your advice. Actually i guess part of my thinking is that i'm from north wales and would like to move back there at some point. Town is fairly popular with tourists and house is not far from the beach etc.. Another possibility is that i could buy my sisters out, but then a definite return in terms of lettings would be necessary? Also i'm thinking long term investment wise, so although house prices may fall in the near future, by the time i come to collect my pension (a fair way off yet), should be ok.

cheers

hoddoi

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Hi there - thanks for your advice. Actually i guess part of my thinking is that i'm from north wales and would like to move back there at some point. Town is fairly popular with tourists and house is not far from the beach etc.. Another possibility is that i could buy my sisters out, but then a definite return in terms of lettings would be necessary? Also i'm thinking long term investment wise, so although house prices may fall in the near future, by the time i come to collect my pension (a fair way off yet), should be ok.

cheers

hoddoi

You could always sell it, bank the cash and buy something rentable in a couple of years time.

With respect to HP in N Wales, it's VERY high at the moment, way, way above the average salary, as I'm sure you're aware. Unless some serious business investment materialises in the next 20/30 years, HP would struggle to be much higher than it is now. IMHO

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Hi - was wondering if anyone could give me a bit of advice on a discussion i'm having with my family:

A couple of years ago my aunt died and left me and my sisters a 100 year old detached 5 bedroomed house in a small coastal town in north wales. The property is in a reasonable condition, but needs some maintenance / updating work. My mum wants to keep it as its an old family home but my sisters want to sell the property as they can't be bothered with it and want money to buy their own houses (tho i think they could just about buy without selling this place). In my opinion with a bit of investment i think it could make a decent place for holiday rentals, its in a great location for snowdonia etc.. and there's room for about 8 people (or perhaps 10 - 12 maxed out) with parking for 3 or 4 cars. Is this a practical idea or should i just go with my sisters, i.e. is it a good time to sell and cash in.

Thanks

hoddoi

My advice to you is to sell the house. Presumably it's mortgage free. You can more easily split the money between yourselves & you won't have family arguments about the house in the future that way. This is presuming none of you want to live in it. If you want to run a business out of it as stated or live in it, you should buy the others out. There is nothing worse than arguments over money in your family.

The best part of all of this though:

You have an ungeared property which will rise in value over coming years. If you sell up and your family uses the money to buy several houses, you will between yourselves own geared property. So the capital gains over the coming years accruing to your family will be much higher because of the gearing if you sell.

Edited by Time to raise the rents.

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You have an ungeared property which will rise in value over coming years. If you sell up and your family uses the money to buy several houses, you will between yourselves own geared property. So the capital gains over the coming years accruing to your family will be much higher because of the gearing if you sell.

And so would the losses. Remember house prices can go DOWN as well as up.

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My advice to you is to sell the house. Presumably it's mortgage free. You can more easily split the money between yourselves & you won't have family arguments about the house in the future that way. This is presuming none of you want to live in it. If you want to run a business out of it as stated or live in it, you should buy the others out. There is nothing worse than arguments over money in your family.

The best part of all of this though:

You have an ungeared property which will rise in value over coming years. If you sell up and your family uses the money to buy several houses, you will between yourselves own geared property. So the capital gains over the coming years accruing to your family will be much higher because of the gearing if you sell.

Wow, does everyone in the country realise their home is a geared investment!

Buy house for £200k with 50k deposit. House doubles over 25 years - worth 400k. But mortgage of 150k has cost £375k to repay over 25 years. So initial geared capital has gone from 50k to 25k - good move and you've be struggling to pay a bloody great mortgage all your lives!

Now, of course you can feck about with figures as much as you like. And some daftoes will say 'hang on property doubles every 7 years.' Well first, it doesn't and hasn't and second it can't. If it does your 200k house now will be worth about 1.4 million at the end of the mortgage.

Now I know people will say 'ah yes, but look at the last 25 years'. Well, it's true, things are different this time. In the last 25 years we had periods of very high inflation. Now we live in a global economy - we used to compete with Germany and Japan - now we compete with India and China. We are going to have no real inflation or increase in living standards over the next 25 years - maybe even a decrease. People can't afford houses NOW. With little or no real wage inflation over the next few decades, anyone who thinks house prices are going to keep going inexorably up is a fool. Simple as that, just plain daft. Most people can't afford a 3 bed semi at 250k now. How they going to pay over a million for one? Answer - their wages will go up by a factor of 4. Really? Then how will we ever compete in the this wonderful global economy. The answer is we won't. Pressure on wages in future will be down.

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If you were to keep it as a holiday let, do your research -in Cornwall, I know, it's the 'sleeps 4' properties that are always occupied. The bigger ones aren't as popular and when they are let, are often filled by parties who don't look after them well - drunken rampages etc.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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