You Inherited a House What Next?
Inheriting a house can be overwhelming for many reasons. You will have many questions that you probably do not have all the answers too. “I just inherited a house, what should I do?” Should you rent it? sell it? how should I sell it?
You have many options and we can help you..
We’re experienced investors in Omaha and the surrounding real estate market, we buy several houses each month in the Omaha NE area. We regularly get calls from individuals and families who have inherited a house and have questions. The info below are some tips to help you with the process.
When You Inherit 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.
When you inherit a house and if you decide to rent the house you will be dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management. This may or may not be 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 houses for cash, as-is.
5) If the market is growing 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 investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property – 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).