Inherited House - What To Do?

[The Masked Tulip]

Hi all,

I need to throw some ideas around here as I would like to get some thoughts and views from some of the regular HPCers. Please, only sensible suggestions and no abuse please.

This is a tad long but please bear with me. This is about something that we rarely discuss on here - what happens when you inherit a house?

As some of you know my Mum passed away recently after a long illness. I have inherited Mum’s house in which I have lived with her for, well, more or less 40 years – I have been looking after my Mum since my Dad passed away back in 1990 and since when she has gone through several illnesses including caner. It has not been easy but I would do it all again tomorrow if I could have her back with me.

It is a big 3 storey Victorian terrace about half a mile from Swansea University and one of the two main hospitals in Swansea.

The suburb in which it is used to be, in my Mum’s day, one of the ‘nicer’ parts of Swansea – it’s the part of Swansea where Dylan Thomas grew up and about which much of his poetry was written – but in the last 15 to 20 years it basically has become ‘student-land’ as people of my Mum’s generation have passed on and the once lovely Victorian and Edwardian ‘town-houses’ have been turned into student HMO accommodation. Most have been gutted inside completely - only Swansea would allow one of it's best attractions to be destroyed in such a way IMPO.

The house on one side of us is a student HMO and the house the other side was converted into 2 flats and one bed-sit a few years ago when the previous owner passed on. Many of the other houses in the road are now student accommodation and it is about a 50 50 split between student accommodation and families in the suburb.

Frankly, the students, IMPO, have trashed what was once a very beautiful part of Swansea – I have superb views over Swansea Bay, can see the Sun rise and set, am about 2 minutes walk from the beach, 10 minutes from the city centre and have 2 wonderful parks nearby.

For about 6 or 7 years now I have been trying to get my Mum to move but she simply would not budge. Truth is, I did not realise how important the house was to her as home and how, in her mind, she still saw the suburb as the one that she had grown up in. Ironically, only last year she decided that she finally wanted to move - gee Mum, you had to wait till the height of the biggest property bubble in history!

So, since my Mum passed on I now find myself living in the house by myself and need to think long and hard about what to do with it. As many of you know, I have been a big bear on house prices for some time and have been predicting huge falls in prices in South Wales due to the ridiculous levels to which they have risen.

The house needs about 30K of work on it - I thought more like 50K but 3 separate people have now, without knowing the detail of what needs to be done but just hearing my thoughts on what needs to be done – have said that 30K is about closer to the mark.

It needs several replacement ceilings, gas central heating to be fitted, to be rewired, lead water pipes replaced (You can get a grant for this apparently), new kitchen and bathroom and then carpets, decorating. The rear garage also needs a new roof and a brick shed needs to be pulled down and removed. Hence, I have always felt that 50K was nearer the mark but, heck, that is just a figure I have got in my mind and won’t let go of.

So, the feeling is that the house is worth, in its current state, about 180K and the 30K of repairs it needs would value it at about 210K. (All these figures could be wrong of course.).

As a family home it simply did not make sense to invest the money into the house as it would be pouring the money down a drain. However, as a conversion into flats or an HMO, well, that’s another matter.

Since Mum passed on I no longer have any family in Swansea. It is my home, I consider myself a ‘Swansea boy’ but I simply have no ties here anymore. The work I do is all outside of Swansea, in fact mostly outside of Wales, and I probably could see myself moving to Cardiff if I stayed in Wales but might even consider a further move, might have to make a further move simply for work reasons.

So, what do I do about the house?

I can’t sell it straight away. It has been my family home for 40 years and there is simply too much stuff that Mum collected over those years for me to sort through in a short period of time – I think it will take a few months to sort through her things and I do not want to rush to clear if you see what I mean. More importantly, there are also 40 years of memories and I just cannot make any rash decision now. In 6 – 12 months things will be different but not now.

Do I eventually sell up and get out – which has always been my plan as I am just tired and fed-up of ‘student-land’? Or do I modernise the house and convert it into an HMO or flats as my own pension? Will that be too much hassle? Will that be too painful in the memory department? Will it actually generate an income? Does the ‘small’ investment that I would need to make to modernise make my 'BTL' a better going concern than someone who has to take out a 90% or 100% BTL mortgage?

Since Mum passed on I have had 2 BTL landlords and one builder contact me all wishing to buy the property – each wants to convert it to an HMO. One BTL landlord has 2 other properties in the area, one has 8 other properties nearby. Word gets out doesn’t it.

One of them though is a good friend - honest chap - and he used to live in the area but, like me, got fed up of the students 5 or 6 years ago, put his house on the market and then discovered no families wanted to buy – only landlords wanted it and none would offer him a good price – so he decided to become a landlord himself. He made so much money from doing this he subsequently bought another property.

Interestingly, he told me this week that he had both properties valued last year and each was valued at 230K. He just had both valued again and the figures came in at 210K each. He told me he has spent 50K each on each property and that whilst the income from the properties has been good he has not made a profit on the 100K he has invested – but that 100K has come from the income. But, he argues, he has two properties that, he believes, will generate him an income and which he believes he will be able to sell in 5 to 10 years when “the next upturn comes” – he says he would like to buy my property and that he knows several other people who would also be interested.

Oh, btw, he told me that he was not able to rent out one of his properties in this current student year. He said that now was the time that you had to sign up students for the next student year as, if you left it till the Summer, you would not find any tenants. So I find this odd, as on one hand he is very keen to buy my house but at the same time he has an empty property this student year.

I do not know what to do. It is much too early to be dong anything - I emphasise that this is still my home and it is full of memories - but I need to start thinking about what I will be doing later in the year/next 12 months.

One part of me tells me to, once I have mourned Mum, to sell up and get out – make a complete break and have a fresh start. Another part of me wonders whether I should become, dare I say it, a landlord with income via this property?

Anyhow, if any of you have got to the end of this long rant – apologies for this but I needed to explain the situation – I would be interested in some valid comments and views from the ‘sensible’ HPCers.

I did not expect to find myself in this position now as I was hoping, and Mum kept telling me , that she was going to live for a long time to come. I had always considered myself a FTB trying to get to grips with hugely inflated prices whilst trying to find somewhere that I could afford, away from student-land, for Mum and myself.

Life is what happens when you are busy making plans.

Thanks for reading through this long post.

TMT.

[Mr Blek]

I don't know how old you are TMT, but 180k invested wisely for 7 years @ 10% would double. I'm not too convinced that being a landlord for your pension is the right way to go. The plus is that you do have the house fully paid, bar maintainence costs.

Maybe someone like DrBubb is best to PM and ask?

Edited March 11, 2006 by Mr Blek

[homeless]

rent it to the gypsies

[Elizabeth]

Some of my cousins sold during a the 1996 + property boom in the same circumstances. At the time I was a bit shocked, because rather than selling at the full potential in terms of the boom they sold at what was a knock down price (probably about 20% less at the time) but they sold it to a family who wanted to live their. Basically they decided what they wanted and they also decided who they wanted to sell it to. They sold it to ordinary people who could make a home in it because they didn't want to use their mums house to chase profits. (its an old Quaker thing!)

Thats one way to go about it. Its your mums legacy. If what you want to do is respect your mothers legacy in the full sense, work out what would she have wanted (for you, for the house) and what would she have been prepared to allow you to trade off (material wealth v the house going to "a good home"?)

Just one idea. You can't control what other people do once you sell, but you can keep or sell anyway you want on your own terms. Anyway, its up to you.

[The Masked Tulip]

I have not heard of a family moving into the area in, well, I forget how long. Must be a good 5 or 6 years. However, I hear about families moving out all the time.

Yes, I would love to be able to sell it to a family and for them to have years of happy memory making moments ahead. Logically, it just ain't going to happen I am afraid.

[Catch22]

Masked Tulip,

Sorry to hear of your loss you must be gutted, but as you say, time to move on with your life. You may think that is easy for me to say, but I lost my mum at the age of six and my father when I was 25 years old, you miss them sure, I still miss them now and I'm 59 years old.

What you need is a family of your own, life is nothing if you don't have somebody to share it with............. Just a minute ...sayagain ...your leaving me why?.....bollards I'm hardly ever on the PC..... and you want half the house ............YOU BITCH :angry: ..........I'm keeping the PC and the modem mind

As to what you decide to do with the house, only you can make that decision, some help that was eh

[vicster]

I like Elizabeth's idea. It might help you, to see the house fulfilling the role it was built for and what your parents bought it for, iyswim. You can't put a price on something like that. Or could you, if you don't feel the need to break all ties, afford to let it out to one?

Having said that I'm sure your mum would want to see you happy and if that took selling it it to an HMO BTL, so you could move somewhere you'd prefer to be then so be it.

OK so I don't actually know you but I'm sorry to hear about your mum, and I'm sure that whatever decision you finally come to (helped i'm sure by some more expert advice than I can offer, from the fine and informed denizens of HPC) will be the right one. You have your head screwed on, from what I can see.

[wannabe FTB]

I can't offer much on the advice front, but I'm really sorry to hear about your mum.

My mum died from cancer nearly a year ago and my dad has been trying to sell their house for nearly nine months (already dropped the price once) he wants to be rid of the memories, he doesn't like coming home to an empty house at the end of the day, he's never had to do it before.

Personally, I wouldn't do anything quickly, wait until you figure out how you feel about the house. Memories change. I used to find it diffiuclt to go and see dad at the house as all I could think about was mum not being there, but now I go round all the time and sometimes I don't notice til I get to my home that she wasn't there. Gradually the house is becoming more dads and more untidy (!) and less of her things are around.

I hope you work out what to do with it, do what you can to make your future secure, as long as it makes you happy, it will make your mum happy. Mums are like that.

[vicster]

As long as it makes you happy, it will make your mum happy. Mums are like that.

I second that

[TheJudge]

My sympathies on losing your Mum.

I lost my Mum to cancer five years ago. Even though it was inevitable it still came as a huge shock. Was very attached to Mum's house because of all the memories, and was horrified when people suggested I sell it as soon as possible. My mum's house sat unoccupied for a short while - and it was very strange - I would arrive at the house on a Saturday morning, no sign of life at all, and there would be condensation on the outside of the windows because the inside of the house was so cold. Fortunately my sister's job moved to the area and she was able to live in the house while we both adjusted to what had happened. Attempts to sort through my Mum's stuff would leave me exhausted and in tears.

Talked to my partner about various options. We talked about moving into the house (and buying my sister's share of course) but I had no desire to move back to the Midlands, no desire to move to that area, and the garden was too small for what we want to do. He suggested splitting the house in two and letting it out so I wouldn't have to sell it but I didn't want to trash the house by letting it out, and didn't want the hassle of renting out a house which is over 100 miles away.

My sister's boyfriend moved in with her, and over the next two years it felt less like my mum's home, and more like their house (especially when I was down there for the weekend and they would start arguing!). They would also take the piss a bit (despite living rent and mortgage free in a lovely house they were always 'skint', too skint to buy a new £40 quid lawnmower when the old one broke). We put the house on the market but then the first buyer pulled out and it ended up taking the best part of year to sell. I had been dreading selling my mum's home, but by the time it all went through I was actually relieved.

So to cut a long story short - I would much much rather remember my Mum's house the way it was when she was alive, with her in it (not with other people in it). So unless it is your ideal house then sell it.

In terms of students rental, demographic trends mean the number of 18-year-olds will decrease. I wouldn't bother.

You talk about selling up once you have mourned your Mum. It may be right to wait until the period of intense mourning is over before making a move. But bear in mind that a part of you will always miss and remember her. Good luck with your new start.

[Rave]

I don't think you'll lose a great deal by waiting to sell, although it depends whether you intend to just buy another place for yourself and live there happily ever after, or whether you'd rather sit on the money and try and call the bottom of the market. Personally I wouldn't bother doing any work on the house before you sell as you're unlikely to get your money back in a stagnant or falling market. Nor would I bother renting it out if the market appears to be saturated.

Good luck:).

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

Condolences and good luck in whatever you choose to do Tulip Jack. I've always found Swansea to be a more welcoming place than Cardiff, which can feel a bit cold and lacking in personality sometimes.

Edited March 11, 2006 by gruffydd

[New Darker Law]

My sympathies TMT.

The questions I would ask myself are:

"Would I want to live here?"

You seem to suggest it's not the place it was and you wouldn't mind moving somewhere else. This would mean selling or becoming a landlord (clearly after the mourning process and clearing of less sentimental belongings).

"Do I want to be a landlord?"

Personally for me the answer is likely to always be no. If I had enough capital to own a house, I wouldn't play it all in one market/asset. Add to this that it is likely to become a more regulated market (see landlord registers, HMO rules, fire regs for starters) and it becomes less attractive. Your tenants by your admission are likely to be students who can be destructive and likely to prioritise rent less. In short I believe there are easier ways to make money "for your pension" than property. For me this leaves the sale option.

"Who do I sell to?"

From what you have written the issues you may consider are (in no particular order); BTL speculator/flipper, a family, this BTL friend, sale price.

Since the area has all but gone past the point of no return regarding HMOs/students I wouldn't worry about adding to this by selling to a developer. The horse has bolted, no point shutting the door now. Take the money.

If selling to the friend, I'd go for full market price. He has told you conflicting information, so he isn't being entirely honest to deserve a good deal.

As I said above, the horse has already bolted, so don't hold out to sell to a family, just liquidate and move on.

Summary

I'm with some of the others on this. I prefer to remember things as they were, when they were at their best. It'll never be the same again, so why linger on it? I also agree that your happiness is important, and if what you do sits comfortably with you, your mother would have been happy with this too.

I wish you all the best with your decisions and the months ahead.

NDL

[echapps]

I don't think you'll lose a great deal by waiting to sell, although it depends whether you intend to just buy another place for yourself and live there happily ever after, or whether you'd rather sit on the money and try and call the bottom of the market. Personally I wouldn't bother doing any work on the house before you sell as you're unlikely to get your money back in a stagnant or falling market. Nor would I bother renting it out if the market appears to be saturated.

Seconded. So many Sarah Beeney wannabees out there that you'll probably get a better price selling a refurb job. And sell on the open market - don't risk accepting a lower price by selling to someone who's approached you privately (you can always sell to these guys later without attracting EA fees - just tell the EA names of any interested parties before signing up).

Don't forget about IHT (but it sounds like you're under the threshold).

Keep memories. For example, make a photo album of the house, its contents, the view from the house, the street, the parks, etc. Who knows, that might even help with the grieving process.

[DonnieDarker]

On related grounds does anyone know if you can dump the proceeds from a house-sale into a pension (SIPPS?).

My future parents-in-law have just inherited a flat which I suspect they will sell...(I will encourage them to sell too).

I think they should put the equity away into their pension funds? Anyone know if you can do that?

[North London Rent Girl]

Personally, I wouldn't do anything quickly, wait until you figure out how you feel about the house.

Sorry to hear of your loss TMT. Wannabe FTB's right. It's a big decision and not one you should be making in your first few months of grieving.

The area sounds so beautiful - it might one day be rediscovered by families. And you might end up with kids of your own - imagine having this lovely big old townhouse in the family - very special. While you're thinking about what you want to do you could buy yourself some time by letting it out to mature students. I think universities normally have separate student lists for mature students (mine did) because some landlords only want to rent to older students - more responsible and nicer to deal with. Might mean making a bit of a rent concession but as you have no mortgage you're in something of a luxurious position. I spose that would mean bringing it into compliance with the new HMO rules but not as much work as divvying it into flats and not as much work to undo if you ever want it back for yourself/your family. Also, I think that most PhDers don't really do strict terms like other students so you wouldn't necessarily have to wait until the autumn.

All of this is assuming that you're not really in need of a chunk of cash. If you are or if there's something special you want to do with it then your mum would surely have wanted you to be smart and sell up at the top of the market - I just think it would be nice to keep it if you possibly can.

But of course in the immediate future you need to concentrate on going through your mum's things as soon as you're ready and allowing yourself to fully experience whatever feelings come up and not distract yourself from that. Remember that the shortest way out is through. All the very best to you, nlrg.

[wifeling-smi]

TMT - for what it's worth - I think you should sell the property and rent for a while. It sounds as though you spent a lot of time discussing the pros and cons of the house with your mum and that she made up her mind to sell and move.

It's so difficult when you clearly associate a place with someone you've lost to be emotionally-detached from it, but I truly believe that selling as soon as possible and using the hard-earned capital your mum had in the house to secure your future as and when would be what she would have wanted.

It also sounds like the area is going down hill fast - student areas tend to do this! It will be sold to a landlord - developer type. It doesn't seem to be an area for family living anymore from what you've said.

I would take all your happy memories of the place and your mum, and get out a.s.a.p.

So, so hard to think straight about these things, but, I think that above all else, your mum would want your future to be secured financially and emotionally and taking your profit while you can would be her way of helping you to do this.

Sell my friend & soon. Wsmi

[colonel faulkner]

TMT, I'm very sorry to hear of your loss. I went through the exact same thing in late 2002, so I know a little about what you're going through.

When my Mum passed away, my brother and I inherited her house, which was pretty smilar to the description you've painted of your own Mum's place. Firstly, I'll tell you that we decided to sell. It was a different situation to yours, in that my brother and I both lived away, neither one close enough to manage the house if rented. We also had a few developers look round & offer, but we were lucky enough to get a young family who we really liked make an offer, so I did not have to worry about how the house would be altered if the developers/landlords got in.

It made me pretty happy that a young family moved in to the place, much like we had many years earlier (I grew up in the house). I think they will be happy there.

Now, what can I tell you about your situation?

Firstly, the practical stuff. When you're sorting through your Mum's things, some of them you will want to give away,some you'll want to keep and some you won't be sure of. The 'unsure' items you should just keep until you've made your mind up.

Secondly, if your Mum has any inheritance tax issues, find a solicitor who you have experience of/have had recommended to you and let them handle it all.They will probably charge 1-2K depending on the estate's complexity, BUT it is worth every penny. The sheer number and complexity/interconnection of the forms and government departments means this is not something you can easily do yourself.

Finally, what's the right answer to your house question? I echo what some others have said so far....your Mum would want you to be happy. Do not feel that you have some obligation to the house. I wrenched with this one for some time, trying to think of ways to keep the house within the family because of all my happy memories. I comforted myself ith the knowledge that the proceeds from the house sale will help to give my Mum's grand-daughter a good start in life, something she would be happy about. I think you should try to ensure that your decision also achieves something that your Mum would've approved of (and your happiness will clearly be in that category).

Keep your chin up.

CF

Edited March 11, 2006 by colonel faulkner

[winkie]

TMT, My mum died and left the family a small home in a village just outside Bridgend. After a period of mourning we sold it as it was, just as she left it to what we think was a property developer he brought it before seeing it. He obtained a grant from the Welsh office to upgrade the property as it didn't have a bathroom and had an outside loo, I believe it is now let out. We did drive by not so long ago the house looks different, but all our good memories are still with us.

My advise would be take as much time as required before making any decisions, the right one will come to you at the right time.

[Xurbia]

Very sorry indeed to hear of your loss.

My only advice is to wait a little. It gives you time to rationalise things and to make good plans. I wish you all the best.

[The Masked Tulip]

Thanks to everyone for your kind words, condolences and for your thoughtful advice.

Thanks especially to those who shared their own personal experiences of losing a parent and having to decide what to do with the family home.

I have, although I do not consider themselves relatives at all now, a half-brother who has not come near my Mum in 15 years and a sister who has only seen my Mum half a dozen times, if that, in the same period. Both have caused my Mum repeated pain and distress.

Both live nearby. Both turned up at the funeral.

The sister rang my solicitor asking to see a copy of Mum's Will so I am expecting them to contest. I am told they do not stand a chance but... not nice...