First, we’re so sorry for your loss. This can be a very challenging time for many reasons as dealing with property ownership is already tough enough even at the best of times.
You’re thinking, “I inherited a house, what to do with this house?” Should I move in? Should I rent it? Should I sell it and if so, how should I sell it?
Undoubtedly, there is a lot going on in your head and you may not feel confident in making a move. In situation like this, a calm and well-informed mind is your best ally for effective decision-making. With that in mind, we have compiled a few important considerations before you make the big decision.
I Inherited A House, What To Do Next?
Please find below some tips on how to navigate the process of inheriting a property.
Make sure the mortgage is paid
This may sound obvious, but if the person who left you the property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to continue paying it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may ask you to refinance into a new loan. If you are not qualified for a new loan, renting it out may not be an option for you.
Tax considerations
We highly recommend sitting down with tax and legal professionals to discuss your inheritance before taking any action. There are major property and income tax consequences that may dramatically impact the cost of owning your investment.
List out all your options
With an inherited home, you basically have three options: rent it out, move into it, or sell it. Compare these few scenarios, weigh the pros and cons of each action, and see how it might fit into your current life situation.
1) Rent it out
Some people who inherit homes decide to keep the house and rent it for extra income. This is a great way to build savings or pay off debts. You just need to be prepared to manage the property and the hassles that can go along with tenants (and toilets). With this in mind, not everyone is well suited to be a landlord. If dealing with upkeep, maintenance, tenants, rent collection and all the nuances of property management doesn’t feel to be best use of your time, consider hiring a reputable professional to help you.
2) Live in it
Another thing you can do with an inherited property is to move into it. Be cognizant that property ownership costs money. Many inherited houses have not been taken care of and will certainly 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 at the very least. You would not want to be caught by surprise as the repair bill(s) might be significant down the road.
3) Sell the property
If you are not interested in living in the house yourself, or you want to avoid being a landlord and renting the home, selling may be your best option. Listed below are a few different routes on selling the house.
– List it with an agent
If the house you inherited has been well cared for and is in good condition and you are ready to part with it, listing it with an agent works best. They can help you determine the best market value of the home, prep it for sale, and walk you through the entire process until closing.
– Sell it yourself
If you are experienced with fixing a house and you have the time, it may make sense to remodel and sell it yourself. It is not an easy and quick process but it will definitely help you make the most profit.
– Sell it to an investor for cash
If you don’t want to go through the time-consuming task of making repairs, calling contractors, getting estimates; or if you don’t have the resources to make costly repairs such as foundation issues, sewage problems, roof replacements, and overall cleanup, you can sell your inherited property to a real estate investor like us. We buy Portland houses for cash, as-is and the process can be as short as 7 days.
We are here to help
As you can see, you have many different options when inheriting a house, and the task of deciding on what to do with it can seem daunting. It is important to seek advice from experts – for example, an accountant may help you with tax issues and a lawyer with legal issues. Many times, people will also contact real estate professionals like us to find out what their property is worth.
We’re seasoned investors in Portland real estate, and we’re looking to buy several houses each month in the Portland, OR area. We frequently get calls from those who have inherited a house and are looking to sell the house.
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 sell the house. If you don’t have a better avenue to utilize the proceeds and the neighborhood is rising in value, we would suggest hanging on to the house– real estate can be a great investment if you know how to correctly read the market.
Additionally, we can assist in comparing prices for any property near Portland – 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).
In certain situations, we may even 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 Portland investment experience can help you win.