We offer our sincere condolences for your loss. We understand that this is a difficult time that comes with many challenges, and managing property ownership can be especially daunting under these circumstances.
You may be asking yourself, “What should I do with this inherited house? Should I rent it or sell it? And if I sell it, how should I go about doing so?” There are many options available to you, but don’t worry because we’re here to assist you. As experienced investors in Southwest Michigan real estate, we purchase multiple houses each month in the Southwest Michigan MI area, and we frequently receive calls from individuals who have inherited a house and wish to sell it. Therefore, we have compiled some helpful tips to guide you through the process.
I Inherited A House, What To Do Next?
Here are some crucial factors to take into account to assist you in making the correct decision:
1) Make sure the mortgage is paid.
It may seem apparent, but if the individual who bequeathed the property to you had a mortgage (unless it was entirely paid off, which is ideal), you must repay it if you wish to retain the property. Some banks may allow you to take over the loan, while others may require you to refinance with a new loan. If you are ineligible for a new loan, renting out the property may not be a viable option for you.
2) The investment is only as good as the manager.
If managing brokers, maintenance, tenants, rent collection, and all the intricacies of property management is not the best use of your time, consider hiring a professional to assist you or sell the property. Some individuals who inherit homes opt to keep the property and rent it out for additional income, which is a sound strategy. However, you must be prepared to handle the responsibilities of managing the property and the potential challenges that come with tenants and maintenance.
3) Property ownership costs money.
It is uncommon to come across a building that has been flawlessly maintained. Therefore, many inherited houses require significant improvements. It may be worthwhile to engage a professional property inspector to provide you with a comprehensive overview of the necessary repairs within the next five years, along with an estimate of associated costs. Unexpected expenses can be extremely costly.
4) Selling a property for top dollar costs money.
If you prefer not to handle repairs, kitchen updates, landscaping improvements, and overall cleaning, there’s no need to worry. We purchase Southwest Michigan houses for cash, as-is, so you don’t have to make any repairs or renovations.
5) If the market will continue to grow faster than your other options, hang on to the investment.
We can assist you in assessing the worth of your property presently in comparison to the long-term advantages of renting. If you can employ the equity in your property in another manner that surpasses the performance of the real estate market, you should consider doing so. However, if you do not have any superior alternatives for utilizing the funds, and the area is experiencing a rise in value, holding onto the property may be a wise choice. Real estate can be a lucrative investment if you know how to accurately interpret the market.
6) Uncle Sam wants a piece of the action.
Before taking any action, it’s important to consult with tax and legal experts to discuss your inheritance. There are significant property and income tax implications that can substantially affect the cost of owning your investment. Therefore, it is crucial to seek professional advice to ensure that you are making informed decisions.
7) Consider all your options.
Under specific circumstances, we may be able to assist you in creating a lease-option agreement that enables you to rent and sell simultaneously, providing you with the best of both worlds. While these types of transactions can be intricate, our investment expertise in South Haven can help you achieve a successful outcome.
8) Compare a few scenarios.
We can aid you in determining the pricing for any property located near South Haven. This includes assessing the highest price that the market will support if you sold the property today without undertaking any renovations, as well as the anticipated value of retaining the property as a rental (in addition to the associated expenses).