First of all, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership can be challenging even at the best of times.
You might be thinking, “I inherited a house; what do I do with this house? Should I rent it? Should I sell it? How should I sell it?”. You may be bombarded with all the frustrations in the world. But let us tell you today that you don’t have to be overshadowed by all the questions. Taking care of an inherited property may seem much the first time, but it doesn’t have to be with the right people on your side.
I Inherited A House, What To Do Next?
Whatever your situation, you’re here because you feel like you need help. And we’re here for you. So here are a few essential thoughts to guide you along your decision process:
1) Make sure the mortgage is paid.
Inheriting property includes inheriting all the financial responsibilities that come with it. If your inherited house still has an outstanding mortgage, you, as the new legal owner, have the duty to continue paying the mortgage. If the premium is fine, then good for you. If not, you may want to talk to the lender about it and explore other refinancing options. If money concerns you, it will help you weigh whether it would be more practical to rent the house or sell it.
Take your time in assessing this because it’s not only mortgage that you must follow through. There are other holding costs that you have to pay, including maintenance, utilities, waste disposal, etc.
2) The investment is only as good as the manager.
If the home you inherited is a rental and tenants reside on it, inheriting the house means you automatically become the new landlord. Don’t get us wrong, being a landlord sometimes sounds great when talking about passive income; however, there’s more to being a landlord than collecting rent. You must keep your tenants happy and handle disputes professionally for the business’s survival.
If you think you can handle being a landlord and be good at it, then you might want to consider keeping the property. You may never be able to find a profitable property again if you sell this one.
3) Property ownership costs money.
Plenty of inherited houses need significant improvements, especially if it has been neglected for a long time. One of the reasons why homeowners decide to sell their property is when their house has already become a money pit. This means that the costs for repairs are already exhausting their finances without any clear sign of hope.
If you want to keep the house but are afraid of the repair costs, you can consider hiring a professional property inspector to give you a detailed rundown on what needs to be done; then a contractor to provide you with a cost estimate of all the necessary repair works. As a practical tip, find professionals
4) Selling a property for top dollar costs money.
This applies to properties sold on the market. If you want to sell the house but don’t have the time to do so yourself, you’ll most likely hire real estate agents who take about 5%-6% commission from your total purchase price. Not only that, selling on the market means you have to make your home stand which involves upgrading and staging, to say the least.
Although, we do have an alternative to this. We’ll tell you at the end of this article, and we think it will significantly help you.
5) If the market will continue to grow faster than your other options, hang on to the investment.
Home values rise and fall (but more on the rise) as time passes. If the projected property values in the coming months/years are more significant than the income you’ll get from renting the property out, then it might be wise to hold on to that property (rent it or reside in it) just up until the values are beneficial. Sell your home once the market starts to seem unfriendly for home sellers.
6) Uncle Sam wants a piece of the action.
If you inherited a property and then sell it, remember that you still have to pay a capital gains tax. Fortunately, the capital gains tax of inherited homes is calculated differently. Instead of using the original price of the house when the decedent bought it, the system now considers the home’s current value upon the original owner’s death. Hence, your capital gains tax is relatively lower.
Your taxable income from the sale of the house is now the difference between the final purchase price and the home’s value at the time of the decedent’s passing. Even if you sold the house at a considerably high price, do you think you can afford to pay your capital gains tax?
After reading through our thoughts above, and you’re still inclined to sell the house, we’ve got a more straightforward way for you — that is to sell your inherited John’s Creek home to us at Spire. Spire Property Solutions is a seasoned real estate investment company that buys houses as they are for cash. It’s considered selling off the market, and you won’t have to hire a real estate agent because we take care of the entire process for you!
We also don’t go through a lender to buy your house, so we can close a deal faster than a market buyer.
Get in touch with us today, and let’s see what we can offer you for your inherited house. We are available at (678) 318 – 1801.