I have inherited a house. It's a 3 storey terrace in a reasonable area but it has been neglected for quite a few years. There's damp problems and it would need the kitchen and bathroom ripping out and replacing and every other room re-doing too. So, do I
a) flog it as it is as a do-er upper
b) shell out quite a bit and try to flog it
c) shell out quite a bit and let it.
I don't have the time or ability to do much of the work myself but I also don't have much money either.
Any advice gratefully received.

d) paint over the problems and flog it as a nice tidy property?

I [along with 3 siblings] inherited an apartment – SW6 no less 🙂

Anyway it needed quite a bit of work doing so we raised a mortgage on it to pay for the work & then let it
The rent more than pays the mortgage & we should have cleared it in 5 or 6 years
We'll look at it again then

As my old dad used to say "it's not eating any bread"

e)insure it, burn it down, get a cheque, sell as a plot, or something

B if you can

Approach the neighbours.

A mate of mine was in a similar situation a few years back with a house in Reading. Started speaking to the neighbours and they were really keen to have 'nice' people living there. They ended up subsidising the refurb by about £10K and then acted as the letting agents without charge.

Not sure if that kind of luck happens twice but possibly worth a try.

Failing that, bodge it and flog it.

Difficult to know without seeing it. But as a rule, I reckon doing up a property to sell isn't worth it, specially if you are getting builders to do the work – the costs will quickly mount up, for very little increase in the property's value.

Get George on it!!!

The Home Show

It very much depends if its at a price that you would expect first time buyers to be interested in.

Because of the huge deposits lenders are demanding, first time buyers have no spare cash for renovations so need the property to be in good nick from day 1.

People trading up can find the cash to do it up exactly as they want it.

As my old dad used to say "it's not eating any bread"

Wise words.

I'd do it up and rent it, even if I had to get a big loan and pay for tradesmen, it would pay for it in the rent.

Keep it as an insurance policy. You can sell it for the lump sum anytime if you need to, but until then you have a nice income supplement. 🙂

I'd just sell it.

I don't know how much things have changed since early this year, but at that point we were advised by a surveyor (and professional house renovator) relative that the amount extra a done up house costs compared to a heap is way way less than the amount it would cost to do a house up – i.e. you spend £20k on doing up, gets you about £10k extra price.

At that point, it was only worth doing if a)you do a lot of the work yourself and don't value your time very much, b)you are involved in the building trade and have local contacts, so you get decent material prices and good rates on the work that needs a professional.

So, for someone buying, it makes sense to buy a nicely done up house (assuming it is done up to your taste), but for someone selling, you might as well just flog it as is.

Bathrooms and kitchens are the worst ones too, as people have particular ideas of how they want them, if you stick something in, chances are whoever moves in next will want to rip it out.

Joe

I would not sell it. See it as your pension.
How well you manage that pension is up to you.

give it to me, I'll keep chickens in it.

You fools! And your bloody liberal-but-only-ever-so-slightly-capitlist values.

The answer is obvious. Set yourself up as a slum landlord. a 3 story terrace you say? Do you realise how many illegal immegrants you could fit in there? 36 at the very least. 72 at a push.

Its easy to set up too. Simply tour your local council estate with a van, picking up the piss-sodden mattresses that have been casually discarded from the bedroom windows, now lying in the front garden. It'll only take you a couple of streets.

Then collar one of the chinese blokes selling DVD's in your local and shout 'TAKE ME TO YOUR LEADER' while gesticulating wildly.

Then when you've made contact, simply arrange to have them all delivered, fresh from Liverpool docks to their new abode, in the back of a container.

Bills are irrelevant. If the gas and leccy gets cut off. Pah. So what? Who ****ing cares. What they gonna do? Report you to the authorities?

Extra money could also be earned if any of them are lookers. Quick digital phoot and pop some cards in your local phone boxes under the title 'Fresh Meat' or something

Do I get commission? 🙂

burn it down and claim on the insurance.

personally find out how much to do it up how much the rent is and work out whether it is worth it.

I would assume £400-£500 per month rent (oop North) which is a tidy sum to be earning every month till you die

Remember if you do rent it out then you will be liable for 40% tax on the profit of the sale when you sell it. Plus tax on the rental income. If you use a letting agent the tax man will catch you.

Contact one of those DIY location house programs and get to be on tv!

(I would do it up if it's not too far away and rent it out)

what about inheritance tax, though? I'd rennovate & rent.

Has Capital Gains Tax not now been reduced from 40% to 18%?

If you don't want the hassle just sell it and reap the immediate reward, if you have a comfortable income now then you may want to see it as a long term income producer but be aware that becoming a landlord is not without it's problems. Bad tenants can make your life hell and cost you a lot if it all goes wrong.

The days of doing up a house quickly to make a profit seem to be behind us, if you don't want to do the work yourself i'd say get rid of it and have the cash in your hand. You then have a huge amount of options including buying another property closer to home if need be?

MrTall, yes you're right it is 18%. Last time I considered selling my rental property it was 40%. Thats good news.

Have a word with a local estate agent about sale value and letting potential.

what about inheritance tax, though? I'd rennovate & rent.

Unless it is in the South East, it might well be under the threshold anyway. If it is over the threshold, then you have to pay it anyway, whether or not you rent it out surely, making it way more sensible to sell if you're already short of cash?

Joe

get in there, clean and paint it. carpets up and out, unless they're in good nick, magnolia walls, white ceilings and wood, unless the wood is nice and just needs cleaning/varnishing or whatever. if you can paint over anything that's about to fall off, do so. if the paint doesn't cover it adequately, fix it as cheaply as poss.
bathrooms and kitchens are very personal, as above, and whatever you do there could well be ripped out, as stated, but so long as everything is clean and tidy, no-one will mind. the key, as in most of life, is to present whatever you have well. make it light and airy. heat it.

and never, ever, buy a house from me. 🙂

if it were me i'd rent it out.

My mate and his wife inherited a house from the wife's uncle. They had a fair bit of debt between them, so they sold their old house, remortgaged the new one for about ten grand, paid off all their debt and went on holiday.

Brilliant!

MrSparkle – do you have a mortgage on the house you live in now?

Assuming yes, I would sell now in the state it is in now and pay off the mortgage on your home.

If you are lucky enough to be mortgage free already – well its all gravy whatever you do!

Do the minimum to make it habitable then start renting it.
3 storey house implies 4-5 inhabitable rooms, £60/week each, say £1000/ month. Enough to spend £2k / year on maintenance and still provide some good income for the rest of your natural.

where abouts is it

ill buy it if its in london!!

we can do without the estate agents and save a load of fees that way

if its not london just stick it on the classifieds?

give the house to your wife thus removing the inheritance tax issue. Then make sure her and the house are insured, send her round to do some painting and burn it down.

No escape from doing the maths….and properly.

1. If you sell it, take the money and put in the bank what does it yield?
2. Take out a small mortgage, do it up, rent it out. As above what does it yield? Yields are only about 5% right now, not much more than you can get on a 1yr fixed deposit. Is it worth all the hassle for a bit more? Sure it might go up in value and 18% CGT is great but you are then taking a view on the housing market. If you own a house already should you really double down on UK housing right now? I dont think anyone knows where it is going.

As for doing it up Del has the right idea. Dont go crazy on kitchens/bathrooms.

Anyone can clean and paint white for next to no money and a bit of time. Get a small mortgage against it to sort the damp, bathroom and kitchen.
Let it youerself for more money and hassle, give to a lettign agent for less of both.. though to be honest most letting agents I've dealt with haven't done anymore than relay messages to the owner..

But you do need to do the sums against your own mortgage as debt is more expensive to service in the long run. It might be better to sell and payoff your debt (beware redemption fees) and have a smaller nest egg to stick in an ISA or weapons/oil/tobacco shares or whatever.. but I can't help feeling that the income for life and selling during a recovery is the most attractive to me – a small mortgage could be paid off from the rental inside 5 years, then it's pocket money!

I would do it up and keep hold of it at the moment, prices are low but just starting to rise in alot of places and this is due to demand with very little supply. By doing it up and possibly renting it out for a year or two you allow the market to come up abit more, hopefully covering the cost of the refurb (get the redecoration done cheap but the damp sorted properly) while generating an income while its rented out then allowing you to sell it on at a higher price. This though is the gamble.

Failing that i would sell it at auction with a decent reserve price on it.
At the moment there is not too much stuff coming on to the market and even less that would appeal to a developer so by selling at auction you might get a few developers bidding on it who will bump the price up and by having a reserve on it you could gurantee if it sold what the minimum you would get for it would be.

Just my 2p's worth.

I would go onto a chat forum and brag about it.
😉

where in the world is it? I've been debating a fix-er-uppa for a while now.

Estate agent round ours reckons some of the do-er-uppas are fetching almost as much as sorted houses as people are paying stupid money again so they can "add value" to a property thinking they've got a bargain – they are in bidding wars to pick up knackered houses!!!

If you've got a bit of cash I'd sort the damp, tidy it up and maybe rent it out, or just keep hold for a bit until things look a bit better if it's close enough to pop round and keep it tidy/maintained – lawns etc.

Re mortgage it, use a little of the cash to do it up. Then get some tenants in. Rest of the money to buy a second (smaller) place outright which is ready to rent. Hey presto, pension sorted. Unless of course you already have a public service pension, in which case you should just flog it as it is and spend the cash on hookers and coke.

Stop being a tight Git 😈 Get Dave billi on it I am sure he will give you a good price 😀

Even better strike a deal with him and share the profits accordingly from a sale when the work is complete 😛 😛

WorldClassAccident – Member

Approach the neighbours.

A mate of mine was …

Now that's landing very lucky indeed. What excellent neighbours.