What To Do When You Inherit A Property
1) Make sure the mortgage is paid.
If you plan on holding on to the property make sure that all payments are up to date. Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, renting may not be an option for you. Another option is moving yourself into the house. This may show the bank that you assume all responsibility.
2) Turn your pain into profit.
Some people who inherit homes decide to keep the house and rent it for extra income. The best option for someone who is not to familiar with how to manage a property & deal with tenants is to hire a property management company. They typically charge 10% of the monthly rent to keep you hassle free. If you want to manage it & keep all profits to yourself that’s fine too. Just be prepared to deal with rent collection & repairs.
3) Property ownership costs money.
Order a home inspection in order to get all repairs assessed. This can help you if you are looking to sell, move in or rent. The majority of inherited properties need upgrades & a lot of work. You can always get a real estate professional such as a contractor to give you free estimate on the repairs.
4) Selling A Property At Market Value Could Cost.
The best option for someone wanting to sell the property fast without making any repairs is to sell to an investor. So if you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, investors are who you need to talk to.
5) If the market will continue to grow faster than your other options, hang on to the investment.
We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your property in another way that outpaces the performance of the real estate market, you should. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on – real estate can be a great investment if you know how to correctly read the market.
6) Pay Your Taxes.
Make sure you discuss your inheritance with tax and legal professionals before taking any actions. There are major property and income tax consequences that will dramatically impact the cost of owning your investment. So make sure you speak to someone before making any move on the house.
7) Consider All Options.
Weigh all options before making a final decision. In certain situations structuring a lease-option agreement may be the best bet. This allows you to rent & sell at the same time. You can also rent or just flat out sell the property. Many options are available for this type of situation. Talk to your local real estate professional.
8) Determining Price.
Speak to a local real estate professional to find out what the property would go for in that area. They can help you determine what someone would buy it for without doing any work inside. They can also help you to find out what rent goes for in the area.