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 Massachusetts real estate, and we’re looking to buy several houses each month in the Massachusetts Massachusetts area. Every month we get calls from those who have inherited a house 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?
Here’s a few important considerations to help you make the right decision:
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 was paid off, 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 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.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Massachusetts 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. 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 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 Revere investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Revere – 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).
9) Understand the Probate Process
When you inherit a house, it usually comes through a process called probate. Probate is the legal process that wraps up a person’s legal and financial affairs after their death. During the probate process, property is identified and given a value, and then it is distributed as the will directs. If the deceased did not leave a will, the probate court will determine how the property should be distributed.
The length of the probate process varies depending on the complexity of the estate and the efficiency of the court. It can take anywhere from a few months to over a year. If the property has a mortgage, the payments must continue to be made during this time.
Understanding the probate process and how it impacts your inherited property can help you make informed decisions. Consult with a probate attorney or a real estate professional to get specific advice about your situation.
10) Evaluate the Real Estate Market
Before making a decision about what to do with your inherited property, take some time to evaluate the real estate market in the area. Are home values in Massachusetts rising, stable, or falling? How long are homes sitting on the market? What kind of rent could you expect if you decided to become a landlord?
By understanding the market, you can make an informed decision about whether to sell, rent, or hold onto the property. A real estate professional can provide valuable insight and advice.
If you decide to sell, knowing the market can also help you price your home effectively. If you price it right, you’re more likely to sell it quickly and for a good price.
11) Maintain the Property
While you’re deciding what to do with your inherited property, it’s important to maintain it. This might involve regular tasks like mowing the lawn or it might involve more substantial tasks like making repairs or updates.
If the house is in disrepair, you may need to invest some money into it to get it ready for sale or rental. Keep in mind that the cost of these repairs could be deducted from the final sale price or rental income.
Even if the house is in good condition, regular maintenance is important. This will not only help preserve the value of the property but also prevent further damage and costs down the line.
If maintaining the property becomes too much of a burden, consider hiring a property management company. They can handle everything from regular maintenance to finding and managing tenants if you decide to rent the property.
Remember, when you inherit a house, it’s important to consider all your options before making a decision. Don’t rush into anything without doing your research and consulting with professionals.