First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough even at the best of times.
You’re thinking, “I just inherited a house, what am I supposed to do with it?” Should I rent it? Should I sell it? If I sell it, how should I sell it?
Tons of options open for you, but…
… we can help.
We’re seasoned real estate investors and we’re looking to buy several houses each month in the Dallas Texas area. Every month we get calls from those who have inherited a house and are looking to sell the house for various reasons… so the info we provide you below are some tips we have learned along the way that will hopefully help you navigate the process.
I Inherited A House, What To Do Next?
Before we get into the options, sometimes people inherit a house with no issues. But it’s also common for others to have inherited a house with title issues. If that’s you, read our blog on what to do in that situation.
Here are a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it’s paid off, which is good news for you!), you need to make sure you continue to make the payments. You’re already going through a difficult situation and the last thing you want to add to the list is a pending foreclosure due to missed payments.
When you inherit a home, some banks will allow you to assume the loan, while others may force you to refinance into a new loan. But in order to do so, the home needs to be in your name. Make sure you have gone through that process first with your attorney before calling any lenders.
If you don’t qualify for a new loan, renting may not be an option for you since you most likely won’t be able to keep the home.
2) Your investment is only as good as your property manager’s.
If dealing with real estate agents, 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. Owning a rental property has its perks. You get to collect monthly cash flow from your tenants as well as the benefit of owning an investment that goes up in value every year.
But, it also has its downsides. You first have to get the home in rent-ready shape every time the tenant moves out. Then you have to go through the process of finding and vetting the tenant to make sure you find the perfect tenant that will pay their rent on time and take care of your investment. The wrong tenant can really do some damage to your property so it’s very important to find the right one. Once you finally do find the right tenant, then you will need to make sure you answer their calls anytime there’s a maintenance issue. Or you can skip all of that and just hire a property manager to take care of it for you!
3) Property ownership costs money.
It’s rare to see a home that’s been perfectly maintained. Most inherited houses need major improvements and upgrades.
Consider hiring a professional property inspector to give you a detailed rundown on what kind of work the home needs. They will spend hours at your home looking at every detail to see if anything is out of code or if anything needs to be fixed or replaced. Once you find out what needs to be fixed or replaced, have a contractor walk the home with you to write up a quote on what that will cost you.
4) Selling a property for top dollar costs money.
Buyers pay top dollar for a reason. They pay top dollar because the home is in almost perfect condition with the most recent upgrades. Buyers are in the market for finding a home they can move into immediately. If your house isn’t ready for anyone to move in yet, then it won’t get top dollar. In order to get top dollar, you will need to spend some money on the house to get it into top dollar condition. And with the cost of labor and materials continuously going up, don’t be surprised by what that contractor quote comes back at.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, or even playing the rental game, don’t worry. We buy Dallas houses for cash, as-is. We can take care of all of the repairs for you and we can close very fast.
5) 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 could be major property and income tax consequences that will dramatically impact the cost of owning or even selling your investment. The last thing you want is to be responsible for a hefty tax bill after going through all of this.
6) Consider all your options.
In certain situations, we may be able to help you structure a financing option agreement that allows you to collect monthly payments on your inherited investment without actually owning the home – capturing the best of both worlds. These kinds of deals can be complicated, but we’re very experienced in putting these types of deal structures together.
7) Compare a few scenarios.
We’re happy to sit down with you and give you all the options available. That way you can compare and see which options might be best for you and your family. Everyone’s situation is different and we understand that, which is why we try to tailor our offers to your needs.