First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times.
You’re thinking, “I inherited a house, what to do with this house?” Should I rent it? Should I sell it? How should I sell it?
Tons of options open for you, but…
… we can help.
We’re seasoned investors in Houston real estate, and we’re looking to buy several houses each month in the Houston Texas area. Every month we get calls from those who have recently gained an inherited home and are looking to sell the house… so the info below are some tips to help you navigate the process.
I Inherited A House, What To Do Next?
Inheriting a house isn’t something that the average person experiences on a regular basis. Here’s a few important considerations to help you make the right decision if you inherit a house.
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and is free and clear, which is great!), you have to pay it (assuming you want to keep the property). 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 your inherited property may not be an option for you.
2) The investment is only as good as the manager.
If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t the best use of your time, hire a professional to help you or cash out now. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements.
Consider hiring a professional property inspector to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive.
4) Selling a property for top dollar costs money.
Let’s face it, if you inherit a house, you can’t almost always assume that the house will need updating and repairs in order to get it market ready. What that means is making the property desirable for potential buyers to want to purchase it as their primary residence. If it makes financial sense for you to go this route of renovating the house and listing it with a real estate agent, then we highly recommend that you do. Making necessary repairs to the inherited home and listing with a real estate professional will earn you top dollar. However,if you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Houston houses for cash, as-is and in any condition. If you would like to sell an inherited property we can definitely help you with that option. We will present a fair market value offer to you so you can sell the house quickly and move on.
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) Uncle Sam wants a piece of the action.
Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences to consider when inheriting a home. If you decide to sell the home you may need to pay capital gains tax as well as estate and inheritance tax, so you will need to be sure to document all aspects of the sale so you can be prepared when it comes down to reporting the sale on your tax return. So speaking to a professional would be a wise move.
7) Consider all your options.
In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our Houston investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Houston – if you sold it today without doing any work, the highest price the market will bear, and the projected value of keeping it as a rental (along with the costs).