Inheriting A House Is Never A Simple Process
Inheriting a house can be a confusing and challenging time for people. You may have just lost a loved one and now you find yourself in new roles, with many new responsibilities that coincide with taking care of an inherited estate.
To compound on top of these new responsibilities and all the mixed emotions that come with inheriting a house – you often have different people giving you their opinions on what the next best course of action is.
I know, I get it, I’ve been there and lots of us have, and it’s extremely challenging. Most of us in this lifetime will deal with a family member passing away, and regardless of what they may have owned, it’s still tough dispersing inheritance.
It can be a cold and cruel experience, and in its worst form – it can drive families apart. No one wants to see that happen and that’s why it’s crucial to get the best advice on your particular circumstances when inheriting property.
Why Not Keep An Inherited Home?
For some, keeping an inherited property is the best option. They have had plenty of time and foresight to plan on how they will keep the property, renovate it, take care of it, and support the property without finding themselves in financial trouble.
But, many people are not well-equipped to deal with all the responsibility that comes along with inheriting a house. There are many costs and lots of work that accompany homeownership, and this is particularly true for older distressed properties that someone may have unexpectedly inherited.
Here are just some of the challenges that come with inheriting a property, they include:
-
Property (Real Estate) Taxes, Back Taxes, and Fees
No matter which state you live in, you are subject to paying property taxes, and some states will require an estate inheritance tax as well.
These taxes may be minor to some, but you may end up being responsible for thousands of dollars in taxes that you do not have at your immediate disposal. This does not include any back taxes on the property that the deceased may have owed. If the deceased had unpaid tax debt or mortgage debt on the home, those dues may fall entirely on the recipient of the inherited property – these debts must be paid to take ownership of the home.
-
Renovation Costs
Most of the time, an inherited property is not at the living standards that many would prefer and expect. Home renovations on an older distressed property can be a long-term and expensive investment. Some people who are inheriting property may not have the resources, time, and understanding to complete a desirable home renovation.
-
Responsibilities of Managing a Property
Some may at first consider not moving into the property they’ve inherited, but decide to manage it as landlords and rent the property.
At first, this seems like a reasonable idea, but the responsibility as a property owner and landlord is not as simple as putting up a “for rent” sign and handing over a key.
Managing properties is a full-time job and should never be considered a part-time responsibility. The financial benefits of being a landlord are not without hard work and diligence as a property owner. As a landlord, you are always on the clock and responsible for any issues that arise with your inherited property.
The property needs to be up-to-code and desirable enough to attract tenants in the first place. Also, the quality of tenant becomes a concern for anyone managing a property, and it’s not worth it for most to deal with the headaches that accompany nightmare tenants.
Professional property management is a career for many people, so it’s not recommended to brush the responsibilities of being a landlord off as light duties.
Learn about Shopping for Distressed Properties in a Buyer’s Market in our recent blog
Why Sell An Inherited Home?
Inheriting a house is never a simple and straightforward process, no matter what other concerned parties may tell you. It’s potentially one of the most challenging times in anyone’s life.
You may want to consider selling your inherited property. If you need financial relief fast, do not want to deal with the headaches and long-term investment responsibilities of renovation, cannot afford taxes and fees, or perhaps it’s a combination of all the above – selling an inherited property fast is a great option.
At the end of the day, it’s best to not make any impulsive decisions regarding an inherited property. Keeping an inherited property may or may not make sense, and it all depends on your varying circumstances.
It’s in your best interest to consult with a professional on what the best steps are for your particular inheritance situation.