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 at the best of times. You’re thinking, “I inherited a house Should I rent or sell ?” How should I sell it? Tons of options open for you, but…
… we can help.
We’re seasoned investors in Roanoke real estate, and we’re looking to buy several houses each month in the Roanoke VA area. Every month we get calls from those who have inherited a house and are looking to sell… so the info below will show you some tips to help you navigate the process.
I Inherited a House Should I rent or sell?
Here’s 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 had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to 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 may not be an option for you. Also, if there is a “Reverse Mortgage” on the property WATCH OUT! These companies often consider the loan in “default” as soon as the owner of the house passes away. If you know the home has a reverse mortgage, act immediately to get the property sold.
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, hire a professional to help you or cash out and sell the house now. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets, the landlord/tenant laws, and a host of other unseen issues.
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.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Roanoke houses for cash, in as-is condition, and normally close in 30 days or less. You can have the cash in your hands, and no worries about the property.
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 Salem investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Salem – 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).
DISCLAIMER: While we do have a real estate broker in Virginia on our staff, we at Cross Properties, Inc. are not attorneys, CPAs, financial advisors, or tax experts. It is always best to consult competent professional advice prior to making any decisions with regard to a decedent’s estate, or disposing of any real estate.