When you inherit a house, that can come with an influx of emotions. The home can end up being a valuable asset for your family, but there will also be several financial decisions you have to make. These decisions can be overwhelming, but you do have to decide what to do with the property eventually.
It comes down to three solid options. Sell it, move into it, or rent it. The easiest and simplest option – typically – is to sell the house and split the proceeds, if applicable.
Some reasons you may want to sell an inherited property quickly:
Vacant properties are costly
Inherited houses are sometimes seen as “free”, but they can still be costly. The house will create mounting costs and expenses. You still have to pay property taxes, insurance, utilities, and maintenance costs. If the house isn’t occupied, it will deteriorate – over time – meaning it could substantially impact the value of the home.
Rentals take time and effort
If there are multiple heirs to the property, chances are you won’t be living together. Basically, that means you’re left with 2 options. Sell, or rent. It’s important to think about whether or not you should turn the home into a rental. Being a landlord will be time-consuming, and potentially costly. Look at all the options. You may have issues renting the house. You may need help with upkeep. And unfortunately, problem tenants are more common than we’d like to think they are.
Many Inherited Properties need work
Many inherited properties are in rough shape. Most often this is because the homeowner is older, sick, or just unable to provide maintenance. This means beneficiaries – or heirs – are responsible for all the repairs before you live in it, rent it, or potentially sell it. Repairs and renovations are expensive even in the best of cases. You may start a repair or renovation only to learn of more issues than you initially planned for.
Probate is expensive and time-consuming
When a person passes away, their property is put into a legal process called probate. Essentially probate is the process of settling a person’s estate after their death. It can be complicated, expensive, and time-consuming. This is often an added stressor families have to deal with on top of the loss of their loved ones.
One of the major benefits to selling quickly after you inherit a property is you won’t have to pay capital gains tax. Basically, the property’s tax base is brought to its current market value at the time of the previous owner’s death. So, you’re inheriting the property at a fair market value. When you sell, you would only be taxed on the value increase while the house is in your hands. So, if you sell right away, you won’t have to pay the capital gains tax, but if you hold the home for 6-12 months before selling, and values increase, you will have to pay based on the difference.
At the end of the day, it might be in your best interest to sell the property quickly. That may mean listing on the open market or seeking a cash buyer for an even quicker transaction. If you’d like to receive a fair cash offer on your house, visit our homepage today!