First, we’re so sorry for your loss. Losing a loved one is a very challenging time for many reasons, and dealing with property ownership is tough even in the best of circumstances.
You’re thinking, “I inherited a house, what do I do with it?” Should I rent it? Should I sell it? There tons of options open to you, and California Family Homebuyers may be able to help.
We’re seasoned investors in Sacramento real estate, and we buy several houses each month. We often get calls from people who have inherited a house, so we know how to walk you through assessing your best options. If you just inherited a house in Sacramento, California and are looking to sell it, here are some tips to help you navigate the process.
I Inherited A House, What Should I Do Next?
Here’s a few important considerations to help you make the right decision with your newly acquired property:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had an outstanding mortgage, you have to pay it if you 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 out the property may not be an option for you.
2) The investment is only as good as the manager.
If you want to keep the home and rent it out, you should be realistic about the responsibilities of property management. You’ll be dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management. Or, you’ll have to hire someone to do it for you. If you don’t want to do either, then keeping the property isn’t for you.
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. If the property was given to you by an aging family member, they may have failed to keep up with regular upkeep because they didn’t have the resources or energy to address it.
4) Selling a property for top dollar costs money.
Selling a property on the MLS could cost money up front. That’s because getting a competitive price for the home will probably require some upgrades (on top of necessary repairs). If you don’t want to deal with updating the kitchen, improving the landscaping, adding new tile to the shower, and overall cleanup — don’t worry. We buy Sacramento houses for cash, as-is.
5) A good real estate market could make keeping the home a good idea.
In the best case scenario, the house you inherit will have some equity. It might even be paid off altogether! Now you need to decide what to do with the equity. You may want to sell the home and use the money in an investment that outpaces the current real estate market. 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. We can help you analyze the value of your property today versus the long-term benefits of renting.
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 Sacramento investment experience makes the process a lot less confusing and stressful.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Sacramento. We’ll discuss what would happen if you sold your inherited 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).