Before anything, I personally want to express, I’m so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership can be tough even 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?
Ot seems that tons of options open for you, lots of variables, and…
… we can help.
We’re seasoned investors in West Palm Beach real estate, and we’re looking to buy several houses each month in the West Palm Beach FLORIDA 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 clearly make the right decision:
1) Make sure the mortgage is paid-and on time too.
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 can only be as good as the property 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 really 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. Generally, what you don’t want to do is wait and let the property sit–at that point it can be a huge liability.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Very, very, very rare. Most inherited houses need major improvements. Along with actually improvements, just like any other home they will need a whole lot of regularly scheduled maintenance as well. Something as simple as leaving the grass to grow too long can turn out to be a huge problem with the city or county when it comes to code violation issues. Thats just one example.
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. You will also want to weight that against what the property manager is saying it would cost for general maintenance, like landscaping in the the example above.
4) *Spoiler Alert* Selling a property for “top dollar” costs money too.
If you don’t want to deal with making ALL the repairs, updating kitchens to current trends, improving landscaping in the front and back, and overall cleanup (including garage and storage areas), don’t worry. We buy West Palm Beach houses for cash, as-is. We clearly buy house fast.
5) If the market will continue to grow faster than your other options, hang on to the investment.
Clearly this cane be excellent, but the IF is a really big IF. 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. Again, this is a big IF. Consult a professional as well as do your research on the market trends.
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. Consult with professionals.
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 West Palm Beach investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near West Palm Beach – 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).