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 it? Should I sell it? How should I sell it?
Tons of options open for you, but…
… we can help.
We’re seasoned investors in Kansas City real estate, and we’re looking to buy several houses each month in the Kansas City Missouri 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’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may be obvious to you, but you’ll need to keep paying the mortgage, unless the home is fully paid off (which is great). If you’re going to sell the home, you won’t have to make those payments for long. Some banks will allow you to assume the mortgage in your name, but others will want you to refinance into your own loan. If you can’t qualify or afford the mortgage payment, then renting out the home long term is likely not a good fit.
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 property decide to keep them as rentals. This can work out well, but just be prepared to deal with tenants, termites, and trash.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements.
It may be worth hiring a professional property inspector (usually costs a few hundred dollars) to give a detailed scope of work for everything that’s needed on the property. Next you can determine how much money this will cost and get a plan of attack together to do the repairs over the next several years. You don’t want to be caught off guard by potentially very expensive repairs.
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 Kansas City houses for cash, as-is.
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 investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near – 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).