Landlord/letting/finders/management fee question/advice.

[motorbiking]

Hopefully, you are getting the idea that agents are a necessary means to getting a good tenant, but that is as far as it goes.. I've come across openRent, but would suggest it's not for the first timer.

The other thing to consider is the limited market for larger rental properties and the overheads.

Of course depending on its location, you could simply AirBnB it - much much easier.

 

[Rodders53]

My 2d-worth.

Go over to the Moneysaving Expert Forums and have a read there... advise all the three siblings to do the same with regard to becoming Landlords.

I'd be inclined to sell now and use the money to pay for the care.
Assuming someone has the power of attorney to do so... or M-i-L is capable and consents...

In fact under PoA it may be advisable to sell rather than risk the pitfalls of renting. I'm assuming that there's no chance of M-i-L returning to that house in future. (EDIT to be in "Donor's best interests").

 

[Mottie]

Ten per cent seems to be the going rate. One factor is labour say they will bring in a ban on no fault eviction, there would be exceptions but it is something to consider. The advantage of an agent is that they relieve you of the hassle of dealing with issues during the tenancy. Read the small print, you can get hit if you end the arrangement with the agents and “introduce” a tenant yourself or through another agency. Regarding return on investment, you will get capital appreciation of the asset, whereas interest rates are going to drop, its a no brainer to keep property if you've got it imo. Getting a good tenant who will stay and pay is ideal, a good agent helps with this, and managing the tenancy gives them more of an incentive.

Problem is, the home is costing @ £75k a year and she has enough for about 5 years before they have to sell the house so when the time comes, assuming she’s still alive, they would need to sell the house fairly quickly. House prices are going down at the moment whereas they could get a guaranteed 5 year fix on the proceeds of the house at just over 4.5%p.a. Which would amount to more than they would receive in rent less agents fees and without the aggro of possible non payment or damages or repairs or getting them out when you wanted them out. Plenty to think about.

 

[Mottie]

My 2d-worth.

Go over to the Moneysaving Expert Forums and have a read there... advise all the three siblings to do the same with regard to becoming Landlords.

I'd be inclined to sell now and use the money to pay for the care.
Assuming someone has the power of attorney to do so... or M-i-L is capable and consents...

In fact under PoA it may be advisable to sell rather than risk the pitfalls of renting. I'm assuming that there's no chance of M-i-L returning to that house in future. (EDIT to be in "Donor's best interests").

No chance of her returning and both daughters have POA.

 

[Doug99]

Do you live in a university/college town? My son owns a couple of properties and only lets them out to students.
That way, they only sign up to contracts covering the one academic year.
It works very well for him as he is listed at the Uni as a preferred landlord and is always oversubscribed each year.

 

[gas112]

Problem is, the home is costing @ £75k a year and she has enough for about 5 years before they have to sell the house so when the time comes, assuming she’s still alive, they would need to sell the house fairly quickly. House prices are going down at the moment whereas they could get a guaranteed 5 year fix on the proceeds of the house at just over 4.5%p.a. Which would amount to more than they would receive in rent less agents fees and without the aggro of possible non payment or damages or repairs or getting them out when you wanted them out. Plenty to think about.

Did your father in law leave a will leaving his share of house to his wife
If not you could suddenly find his will leaving his share to the kids with the stipulation she lives in it till death or care then kids get their share that way you are ring fencing a good few hundred thousand in your case

 

[Mottie]

Did your father in law leave a will leaving his share of house to his wife
If not you could suddenly find his will leaving his share to the kids with the stipulation she lives in it till death or care then kids get their share that way you are ring fencing a good few hundred thousand in your case

Nah. He died a good few years ago. Joint tenancy, not tenants in common (as me and Mrs Mottie have) so she got the lot. She sold that house and downsized to the current one.

 

[JonathanM]

not tenants in common (as me and Mrs Mottie have)

Is there some advantage to that? I thought married couples pretty much always were joint tenants.

 

[Mottie]

Is there some advantage to that? I thought married couples pretty much always were joint tenants.

Joint tenants means when one dies, the other gets the whole house to themselves, tenants in common means you each own a percentage of the home (usually 50/50 but can be any percentage split) and on the death of the first tenant, their percentage is held in trust for whoever they stipulate (usually the children). Means that if the survivor goes in care, the care home/local council or whoever can only take their half towards care costs. That’s the simplified version.

 

[JonathanM]

Joint tenants means when one dies, the other gets the whole house to themselves, tenants in common means you each own a percentage of the home (usually 50/50 but can be any percentage split) and on the death of the first tenant, their percentage is held in trust for whoever they stipulate (usually the children). Means that if the survivor goes in care, the care home/local council or whoever can only take their half towards care costs. That’s the simplified version.

Thanks, very interesting. The only downside I can see would be this. Say you are in a really nice care home, and burn through any savings and half the house. You reach the limit where the council start paying. But the council say they will only pay for a much less nice nursing home. But apart from that it all sounds like a good idea.

 

[Mottie]

Thanks, very interesting. The only downside I can see would be this. Say you are in a really nice care home, and burn through any savings and half the house. You reach the limit where the council start paying. But the council say they will only pay for a much less nice nursing home. But apart from that it all sounds like a good idea.

Yeah, always that risk but the one Mrs Motties mum is in is really nice. She is paying but there are others in there that are not. We would hope that if she’s still in there in ten years time when the money runs out, they'd let her stay. All of her sisters/brothers suffered with dementia and they lived into their 90's. She's 84 so could be around for some time. We know an elderly couple, both with dementia, who are in the same care home. One of them pays, the other is paid for. They are not short of a few bob and had their own accountancy firm years ago so presumably they have put something in place. If only we all knew when we were going to die - it would be so much easier to plan ahead!

 

[motorbiking]

The two with PoE can collect the money as agents of Mrs Motties' mum or if that causes an issue they can deduct a management fee and split the remainder appropriately.

This might need a bit more looking into but since each can earn £1000 tax free from the property. With the 2 sisters the brother and the Mum, there is 3k of rental income that can be earned tax free.

So roughly 23k gross, say 5k costs, 18k net - sisters and brother earn 1k each - 15k is taxable.

 

[ReganAndCarter]

Problem is, the home is costing @ £75k a year

Suddenly my 91 year old father's carers who visit him 3 times a day 7 days a week seem like a bargain for £800 p.m. Luckily my 88 year old Mum is still fairly independent, for now. She can look after herself and cook. Even keeps the garden tidy ish. Just have to mow the lawn and get her shopping.

 

[Notch7]

Suddenly my 91 year old father's carers who visit him 3 times a day 7 days a week seem like a bargain for £800 p.m. Luckily my 88 year old Mum is still fairly independent, for now. She can look after herself and cook. Even keeps the garden tidy ish. Just have to mow the lawn and get her shopping.

Yeah my Dad had carers 3x a day.

And we managed to find a gardener at £16/hr who did 2hrs every 2 weeks


But my father in law, who had Lewy body dementia needed to go into a home, that cost £1400 a week

 

[algas]

Don't know if anyone else has mentioned it but try to get a guarantor for the tenant so if they don't pay or trash the house thenyou have some comeback, we had to do this for my daughter when at uni in London, as it was I kept the property in better condition than when they moved in.
" Dad dont forget to bring tour tools when you come "