| Keeping inherited property in the family. If you've recently lost someone close to you, we're sorry you find yourself here. Just when you may be heavily involved with family matters, property issues may surface that you hadn't planned for. |
If you find yourself with an inherited family property on your hands sooner or later the question arises of what you're going to do with it. Perhaps it's the property you already live in or possibly your parents' house. At some stage your thoughts may turn to finding out your options for keeping your inherited property in the family.
Keeping your inherited property in the family
Different family members may have conflicting views of what's best. Financial pressures may or may not be forcing you to think practically. There may be a mortgage on the property which still needs to be paid, or the issue might be how to best release the equity in the property while keeping your inherited house in the family.
Although these days people are generally much more savvy about the potential of property, it's our experience particularly when dealing with older people, they often under-estimate a property's value.
Keeping inherited property in the family can become problematic if different family members have different views on what's best. And the "related parties" issue, means it's not always possible for one family member to buy a property to rent to another. Not unless it's bought with cash.
You could be forgiven for thinking keeping inherited property in the family is just too difficult. It's true that many families simply sell their inherited property on the open market for the best price they can get. This is the best way to maximise the proceeds unless a deal is reached between family members eg. one person buys another out.
Of course you may decide to take a more pragmatic approach. Could keeping your inherited property in the family simply mean finding a solution that allows you or other family members to continue to have the use of it? Effectively, to remain living there.
The sell to rent option
If you're prepared to take this broader view of keeping inherited property in the family more options open up. The question then becomes can you find a suitable third party to buy the property from you and rent it back to the family?
A family friend might fit the bill, and is appealing to some people who prefer to be dealing with someone known to them for a long time. This is a particularly good solution when someone you know has some experience of being a landlord. However, personal arrangements still need to be formalised for the protection of all parties. There's a large amount of cash involved. It is better not to confuse personal with informal, for the protection of all concerned.
If you'd prefer to keep arrangements on a firmly business footing your plans for keeping inherited property in the family might extend to a local commercial landlord or possibly a professional property buyer - preferably a sell and rent back specialist.
A local property landlord might suit you well enough if you can afford the market rent for the property (or can strike a special deal) or don't need any long term commitment. However by its very nature keeping family property in the family implies a long term arrangement so the trick is to someone sympathetic to what you're trying to achieve.
Using a specialist sell and rent back company
So what about the possibility of keeping inherited property in the family using some form of long term sell and rent back arrangement? Security will be uppermost in your thoughts which is why some companies give you the automatic entitlement to re-new the lease or will issue consecutive leases at the time of sale.
Unlike a regular house sale there's quite a bit to factor into a sell and rent back arrangement. But the basic idea is that a third party will buy the property and rent it back to you on pre-agreed terms. If you prefer, you can think of it as a form of equity release. Exactly how the price and rent are calculated depends on the circumstances surrounding the agreement (type of property, how long you'd like the use of it, how much you can afford to pay in rent and that kind of thing). However the major downside is that you won't achieve the full asking price for the property - what it would have sold for on the open market nor is the agreement likely to be "forever".
But there are also a number of advantages to keeping inherited property in the family using a sell and rent back type of arrangement. You can get access to the proceeds from the sale quickly. There's no prospect of the sale falling through nor will you find your sale stuck because of an issue with a property chain. But above all else you or other family members will have a secure tenancy on a manageable rent for the duration of the agreement.
To read more about renting back or to make an initial enquiry online use the Sell And Rent Back button on the main menu. Or call us on 0800 043 0669 to find out more about how it all works.