What To Do When You Inherit A Property

16 Jun What To Do When You Inherit A Property

Everyone is presented with the same three options when they inherit a property – move into it, rent it, or sell it.  That keeps it simple, so now let’s dig into the considerations you need to have for each option.

Before you Decide to Move in

• Determine the financial state of the property.  If you’ve inherited a property, chances are that it is paid for. However, there are some cases in which there may be a balance left on the mortgage or another lien against the value of the property. Are there any mortgages, loans, liens or lines of credit against the property? Take a look at the most recent statements or contact the loan holder to find out how the loan needs to be paid.
• Other debts you may inherit.   Even if the property is paid for, check for real estate taxes or insurance fees that the previous owner may owe.
• Consider other costs. Consider the cost of maintenance and other services
• Make sure you can afford it. Stay organized so you can determine if staying in the home is a financial possibility for you.

Before you Decide to Rent

• Decide who will manage the property.  If you decide to rent out your inherited property, you can choose to serve as the property manager or hire a property management firm.  If you live within a reasonable distance of the property, this may be a good option for you. A management firm typically costs from around 10 to 30% of the rent.
• Take care of the liability.  Change over your insurance coverage to a landlord policy before any tenants are on the property.
• Determine the tax responsibility. Inheriting and then renting a property can have both tax benefits and drawbacks. Consult with an expert on what your tax liability may look like.

Before you Decide to Sell

• Determine the property’s true value. Are there any mortgages, loans, liens or lines of credit against the property? Are there real estate taxes or insurance fees owed? Add these liabilities together to determine how much of the sale proceeds you’ll need to use to pay down the property’s debts.
  Consider the tax responsibility. Consult with an expert on what your tax liability may look like if you sell the property.
• Decide how you’ll sell the property. If you decide to sell an inherited property, you’re probably hoping to sell it quickly and maximize the proceeds from the sale. That’s perfect, because that’s exactly what we do at Housale. See our process here and learn about how we can help you sell your inherited property quickly and with avoid real estate commissions and fees.