You have just inherited a house. This probably means that you’ve lost somebody very dear to you. First of all, we’re so sorry for your loss. This can be a very challenging time for many reasons. Just dealing with property ownership, in general, is tough even when times are good.
You might be asking yourself, “I inherited a house, what should I do?” Should I rent it? Should I sell it? How should I sell it?
Fortunately, you have plenty of options at your disposal, and we can help.
We’re experienced investors in real estate especially in Raleigh, and we have a goal of buying several houses each month in the Raleigh NC area. Every month we get calls from those who have inherited a house who are looking for the best way to sell it. If you are in this same situation, we have provided some tips below to help you navigate the process.
I Inherited A House, What To Do Next?
Here’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
If the property you inherited has a mortgage against it, you will have to pay it. This is assuming you want to keep it. If the house is paid off, then great, that is something you don’t have to worry about. If there is a mortgage, some banks will allow you to assume the loan, but there is a good chance that they will require you to refinance into a new loan. If you can’t qualify for a new loan, then renting out the property may not be an option for you.
2) The investment is only as good as the manager.
Managing a rental property is a huge undertaking especially if you have no experience with it. If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t something you want to invest time and energy in, you can always hire a professional to help you. If that is still not something you are comfortable doing then I think it’s best to just cash out and sell the home. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy indeed, but you just need to be extra prepared to manage the property and the hassles that can go along with it. Are you okay with dealing with tenants and leaky toilets in the middle of the night?
3) Property ownership costs money.
It’s rare to see a house that has been perfectly maintained. No house is perfect. I would also say that most inherited houses will need major repairs and improvements. Are you ready to invest the cash in fixing up that house?
Consider hiring a professional property inspector to give you a detailed report 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.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping, and just overall cleanup, don’t worry. We buy Raleigh houses for cash, as-is.
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 sell right away. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on to it – 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 that will dramatically impact the cost of owning your investment.
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 investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Raleigh. We can help you with seeing the difference between selling your house fast today versus keeping the property as a rental along with the associated costs long term.