First, we’d like to say that we’re very sorry for your loss. This can be a difficult time, and the handling of property ownership is challenging even during normal times.
You’re saying to yourself, “I inherited a house, what do I do? Should I rent or sell it? How should I go about selling it?”
Many options are available to you, but…
… we can assist you.
We are experienced investors in Salt Lake City real estate, and we seek to purchase several homes every month in the Salt Lake City area. Each month we get phone calls from individuals who have inherited a property and are looking to sell it… So, we’ve laid out some tips below to help you through this process.
I’ve Inherited A House, What Should I Do Next?
Here are some important factors to consider in making the correct choice:
1) Ensure the mortgage is paid.
This may seem like a no-brainer, but if the relative or other person you inherited the property from had a mortgage (but, if it had no mortgage and was completely paid off, that’s great news!), you’ll need to pay that (if you’re wanting to keep the home.) There are lenders who will let you assume the loan, but others might require you to refinance it into a brand new home loan. It’s possible you don’t qualify for a loan, in which case renting the property might not be an option you can pursue.
2) An investment is only as good as the person overseeing it.
If the notion of managing agents, tenants, upkeep, rent collection, and all the many other aspects of rental property management doesn’t seem like the best use of your free time, either hire a professional to handle it for you or cash out right now. There are people who inherit a property and keep it as a rental for additional income. That’s certainly a wise strategy, but you’ll need to be fully prepared to manage it, including all of the hassles that can come with having tenants (be prepared to fix some toilets.)
3) Property ownership actually costs money.
It’s unusual to encounter a property that has been perfectly kept. The majority of inherited homes actually need significant work.
Think about hiring a reputable, licensed property inspector who can give you a breakdown of repairs and upgrades you’ll need to take care of within the next five years along with cost estimates. Surprise repairs can often be very expensive.
4) Selling a property for top dollar costs money up front.
If updating kitchens, making repairs, updating the landscape, and other clean up doesn’t appeal to you, there’s no need to worry. We buy Salt Lake City houses for cash, as-is, with no repairs necessary on your part.
5) If the market is going to grow faster than your other options, hang on to the property as an investment.
We are very experienced and can analyze the value of your inherited property today compared to the long-term value of renting it. If you have another use for the equity in the property that would be a better investment, you should pursue that. If you don’t have a better option and the property’s local area is increasing in value, hold on to it – real estate can certainly be a wise investment if you are able to accurately gauge the market.
6) Uncle Sam would like a piece of the action.
Don’t underestimate the importance of going over your inheritance with reputable tax and legal professionals. Significant property and income tax rules exist that will definitely affect the cost of keeping your investment.
7) Consider all available options.
In some situations, it’s possible we can help set up a lease-option contract that would allow you to lease and sell your property simultaneously – creating a win-win situation for you. These deals can be tricky, but our Centerville investment expertise can help you succeed.
8) Compare multiple scenarios.
We’ll assist you in judging the value of any property near Centerville – if you were to sell it today without performing any repairs or upgrades, the highest price you might realistically get, and a projection of value if you were to keep it as a rental property (together with the associated costs.)