The first thing we want to say is we’re so sorry for your loss. This is a tough time for many reasons, and dealing with an inherited property can add lots of pain to an already overwhelming situation.
“I inherited a house, what should I do with it?” Should I rent the house out? Should I sell it? Do I fix it up first? Will I get my money back if I fix it up?
The good news? You’ve got tons of options. But it can be challenging to navigate through and know which is the best for you.
I Inherited a House, Now What?
Here are a few things to consider:
1) Be sure mortgage payments get paid.
It may seem obvious, but if the person who left you a house had a mortgage (unless it was paid off, which is awesome!) then you gotta pay it (assuming you want to keep it). The bank might allow you to take over the loan, but others might force you to refinance. You also might not be able to rent it out if you can’t get a new loan. Now, the important thing to remember is that the bank will likely not give you much problem as long as they continue to receive the monthly payments. Keep up with those and you will save yourself a lot of headache. If you want / need to speak to the bank, they will likely want to receive some proof of your “authority” to work on behalf of the decedent. Acceptable items include: Letters of Authority from a Probate Court or a Certificate of Trust. Power of Attorney documents are no longer good upon death.
2) Rentals are only as good as their managers.
Rent collection, maintenance, brokers, tenants, maintenance, courts, and all the nuances of property management aren’t the best use of your time, so it’s probably best to just hire a professional upfront or sell and cash out.
People who inherit houses often decide to keep them and rent them out for extra income. That’s a good strategy, but you have to be ready for the hassles that come along with tenants, like fixing toilets.
3) Rental houses have costs.
Rarely do you see a house that’s been perfectly maintained. Most inherited houses need a lot of work. You don’t have to go crazy fixing the place up. Getting a place “rental ready” usually means getting it most of the way there. You don’t want to upgrade a house too nicely and then have tenants who are hard on the house move in and ruin all your nice updates.
Hire a professional property inspector to give you a detailed list of what you’ll need to do within five years. Click here for a breakdown on the most popular repairs, and their estimated costs.
4) It also costs to sell for top dollar.
We have prepared a list of the top 5 things to do to your home to increase its value. If you don’t want to deal with repairs, kitchen updates, landscaping, or overall cleanup, we buy Detroit Metro houses for cash, as-is. Click here to get a free cash offer on your property today.
5) Hold on to the investment if the market keeps growing.
We can help you compare the value of your property today to the long-term upside of renting. If you can use your equity in another way that outpaces the real estate market, we recommend it.
If you don’t have anything better to do with your money and the neighborhood is increasing in value, real estate can be a good investment.
6) Uncle Sam wants in.
Don’t forget to talk to a tax and legal professional before you take action. You’ll face major property and income tax consequences if you don’t.
7) Think about all your options.
It’s possible to get the best of both worlds by using a lease-option agreement. These deals can be complicated, but with our Detroit Metro investment experience, you can be successful.
8) Make a comparison between a few things.
We’ll help you figure out the value of any Detroit property – if you sold it today without any work, the highest market price, and projected rental value (plus costs).