Inherited a House
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; what to do with this house?” Should I rent or sell it? How should I sell it?
Tons of options open for you, but…
… we can help.
We’re seasoned investors in Philadelphia real estate and looking to buy several houses each month in the Philadelphia, Pennsylvania, area. Every month we get calls from those who have inherited a house and are looking to sell the house… so the info below are some tips to help you navigate the process!
I Inherited A House. What To Do Next?
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 had no mortgage and was paid off, which is excellent!), you have to pay it (assuming you want to keep the property). Some banks will allow you to accept 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. We do not always know what our relatives may have owned in debt. Many times after their passing, we attempted to sell the home and noticed a lot of unpaid fines attached to the house. Since we are not similar to our loved ones’ finances, you may find they took out a second mortgage or even a home equity line of credit. All of these would need to be paid before selling the home. In certain instances, depending on how much is owed, you could walk with almost no money from selling your loved ones’ homes. Understanding what is precisely owed on the house before looking to sell is essential.
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 now. Some people who inherit homes decide to keep the house and rent it for extra income. That’s an excellent strategy. You must be prepared to manage the property and the hassles accompanying these homes. Most of the homes in Philadelphia we inherit are built in the early 1900s. There is plenty that can go wrong with an older home. You can receive property in good condition initially, which could cost you tons of money later down the road. It can almost seem like you are doing a new project every month if the house was not worked on in years.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need significant 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 and estimated costs. Surprises are very, very expensive.
3) Property ownership can be a liability
Just because you own a home now does not mean it won’t be a hassle at times. There are plenty of things that can go wrong with a home, not just maintenance. Owning a property comes with tons of responsibility. Suppose someone was to fall and get hurt doing work or even passing by your home. You could become personally liable. We get some snowy winters; if you do not live in the house, you have to worry about shoveling and salting when the temperature drops. Not living near the home could put you in serious jeopardy of something going wrong.
4) Selling a property for top dollar costs money.
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 real estate market’s performance, you should. If you have nothing better to do with the money and the neighborhood is rising in value, hang on – real estate can be an excellent investment if you know how to read the market correctly.
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. Significant property and income tax consequences 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 deals can be complicated, but our Philadelphia investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Philadelphia – 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).
We’re Buying Property 215, a family-owned real estate company specializing in purchasing a property. We buy houses in Pennsylvania regardless of the overall condition! When selling your property to our company, expect to make no repairs, conduct no inspections, and be accountable for no closing costs. We can close on your home within twenty-one days! The Better Business Bureau accredits our small business with an A+ rating & 5-star google reviews!