First, we are sorry for your loss. Inheriting a home can come with challenging emotions and decisions, and we hope this information can help educate and navigate some of the decisions you will be making in regards to your inherited property.
An inherited house can be a good asset to you and your family. When it comes to an inherited property, you typically have one of three options: sell it, move into it, or rent it out.
We’re seasoned investors in Baton Rouge real estate, and we get calls every month about inherited properties in our area. Here, we will share some of the tips and information we give them every day about their inherited property.
I Inherited A House, What To Do Next?
Here’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
Inheriting a house sometimes can mean inheriting an extra mortgage as well. Sometimes the debt is paid before the original debtor passes and sometimes it isn’t. Either way if you inherit a house with a mortgage, you are now responsible for paying off the inherited property. Don’t panic, there are options for that. With interest rates as low as they are right now, refinancing the mortgage is probably your best bet if you qualify. You should also check that the mortgage isn’t more than the property is worth. If this is the case, you may want to consider opting out of inheriting the property. However if the mortgage is manageable for your financial situation, this could be a good asset for you and your family. Keeping it as a rental to pay off the rest of the mortgage is usually a good option. Living in the inherited home is a possibility as well. We are also always on the lookout for properties to buy. We could give you a great offer if that is something you’re interested in with your inherited property.
2) The investment is only as good as the manager.
If dealing with brokers, maintenance, tenants, rent collection, and all the nuances of property management isn’t the best use of your time or something you would like to do, there are lots property management teams here in Baton Rouge you could consider hiring (we can recommend a couple) or selling the property could be the better financial solution. If you keep the house as a rental be prepared to manage the property and the hassles that can go along with tenants and toilets.
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. The biggest ticket items are roofs, foundation, termites, and AC systems. If you have problems with any of those, address them immediately.
4) Selling a property for top dollar costs money.
Inherited properties often come to us at unexpected times. If you don’t want to deal with making repairs, updating kitchens, improving landscaping, and the overall maintaining of the property, we would be happy to help you with that. We buy Baton Rouge houses for cash, as-is.
Also, there are occasions where the inherited home has more than one person it has been passed down to. Sometimes family members don’t agree on how to proceed with the property. It can cause a lot of distress among family members. Selling could be one of the easier options in this situation.
5) If the market will continue to grow faster than your other options, hang on to the investment.
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.
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 Baton Rouge investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Baton Rouge. We’ll show you what the property may sell for today without any work at the highest market price. We can also figure out the potential, projected value of keeping the property as a rental along with some of the costs associated with managing and maintaining the property. Either way, BuyHousesBR would love to help you figure out the best way to move forward with your inherited home.