We understand that the loss of a loved one is an incredibly difficult time, filled with emotional challenges and important decisions. The question of what to do with a property that you’ve inherited is often at the forefront of these decisions, leaving many to wonder, “I’ve inherited a house, now what? Should I rent it out, or would it be better to sell it? And if selling is the best option, how should I go about it?
Rest assured, you have a multitude of options available to you, and we’re here to assist you in navigating this process. As seasoned real estate investors in the Cypress area, we’re actively seeking to purchase several homes each month in the Cypress, TX region. We regularly work with individuals like you, who have inherited a house and are seeking the most straightforward path to selling their property.
In the information that follows, we’ll provide you with some helpful tips and insights to guide you through the process of handling your inherited property.
I Inherited A House, What To Do Next?
So, you’ve found yourself thinking, ‘I inherited a house, what are my next steps?’ Don’t worry, we’ve got you covered. Below, we outline some crucial factors to weigh as you navigate this decision-making process:
1) Make sure the mortgage is paid.
First and foremost, address the mortgage situation. While it may seem like a no-brainer, it’s crucial to understand that if the property you inherited is still under a mortgage, you’ll need to continue making payments to avoid any issues. This is, of course, assuming you wish to retain ownership of the property. Depending on the bank, you might have the option to assume the existing loan, or you may be required to refinance and take out a new loan. Keep in mind that if you’re unable to qualify for a new loan, renting out the property might not be a feasible option.
2) The investment is only as good as the manager.
If the responsibilities of managing a property – which include liaising with brokers, overseeing maintenance, handling tenants, and ensuring rent is collected on time – feel overwhelming or not the best use of your resources, then it might be wise to consider enlisting a property management professional. Many individuals who inherit properties opt to retain them and use them as rental properties, generating a supplementary income. This is undoubtedly a viable strategy. However, it’s essential to brace yourself for the potential challenges associated with property management, ranging from demanding tenants to unexpected maintenance issues.
3) Property ownership costs money.
It’s uncommon to come across a property that’s in perfect condition. In fact, most inherited homes are in need of significant upgrades and improvements. Therefore, we recommend bringing in a professional property inspector to assess the condition of the house. They will provide you with a comprehensive report detailing any necessary repairs or improvements that should be made within the next five years, along with an estimated cost for these updates. This proactive approach will help you avoid any costly surprises down the line.
4) Selling a property for top dollar costs money.
You should know that achieving a top-dollar sale often requires an investment in repairs, modernizing features like kitchens, and sprucing up the landscaping. However, if this seems overwhelming, don’t fret. We specialize in purchasing Cypress homes for cash, exactly as they are, no upgrades needed.
5) If the market will continue to grow faster than your other options, hang on to the investment.
When considering the potential growth of the real estate market, it’s important to evaluate whether holding onto the property is in your best interest. We’re here to assist you in comparing the current value of your property with the potential long-term benefits of renting it out. If there’s an alternative investment that could potentially offer greater returns than the real estate market, it may be wise to leverage the equity in your property accordingly. On the flip side, if the neighborhood is appreciating in value and you don’t have a more lucrative use for the money, holding onto the property could be a smart move.
6) Uncle Sam wants a piece of the action.
It’s essential to consult with tax and legal professionals to fully understand the implications of your inheritance. Keep in mind that there can be significant property and income tax consequences that could greatly affect the cost of maintaining your investment.
7) Consider all your options.
Consider the possibility of a lease-option agreement. In some cases, we can help you structure a deal that allows you to rent out the property while also retaining the option to sell, effectively giving you the best of both worlds. These types of transactions can be complex, but our wealth of experience in the Houston market can guide you to a successful outcome.
8) Compare a few scenarios.
We’ll work with you to compare a few different scenarios, helping you understand the potential financial outcomes of each. This includes calculating the price you could receive if you sold the property today without making any improvements, the highest price the market will bear, and the projected value of the property if you decide to rent it out, factoring in all associated costs