Inheritances are things almost nobody expects. It’s money and property that relatives pass on to you, so you don’t take into account its value or encumbrance.
The average inheritance value goes is at $13,300. Millennials expect to get around $58,000 by age 50 from their parents too.
If you inherited a house, sometimes it won’t feel like a jackpot. If you’re inheriting property you don’t want, you need to know what you can do with it.
What can you do with it? What actions should you do when you inherit a house? In this guide, we give you all the options you have when you get an inheritance house.
1. Respect The Estate’s Waiting Period
Before anything else, the best move you can do in respect of your departed relative is to wait. You would want to observe your estate’s waiting period to show due respect. Whether you like the person or not, wait.
In some states, an inheritance house forces the state to push a waiting period on you. In Arizona, for example, most wills and testaments ask you to survive the deceased for a month. It’s smarter to wait for the due process to run its course.
Apart from finances, the first few weeks after someone’s passing can be emotional. You can make decisions that you won’t be proud of. It’s vital to have the right state of mind first before deciding on what you can do with the property.
2. Maintain The Inheritance House
Once you finish the waiting period, your next move after you inherit a house is to maintain it for now. Whether you want to sell an inherited house or keep it for yourself, you need to keep everything in order. All utilities and insurance policies need to get an update to prevent them from lapsing.
First, update and pay for the insurance policy of the home. Track down the insurance and see if there is anything you need to update to your side. Inheriting property means taking care of all the needs that the home asks of you.
You would also need to find all the utilities, track them down, pay them, and update them to your name. Disconnect everything that you don’t need even when selling the inheritance house. This includes subscription services, cable, and non-essential utilities.
The last thing you want is to sell an inheritance house that has disconnected heating and electricity.
3. Do Some Housekeeping When You Inherit A House
Once you get all the utilities and paperwork once you inherit a home, manage the housekeeping. One of the biggest hurdles of inheriting property is making sure it looks great. Whether you take it or sell it, you want to make sure it’s ready and groomed.
If you’re inheriting property alone, the best way is to check the inside of the property for anything you want. Check for any valuables, cash or even items that you want to take for yourself. If you inherited a house with your siblings, bring them with you, together with any close relatives.
Once you finish clearing the inside of the property, sell off any of the remaining valuables for extra cash. You can also auction them off or donate them to charity, depending on the material. You would also want to do this as soon as you can.
Many inheritors have an issue with an inheritance house when they become very sentimental. If you are inheriting property from your parents or someone you love, people get emotional. Nobody wants to sell anything in it, freezing the home in time.
While there is a time to grieve, holding onto everything for a long time can be problematic. Not taking an action will cost you money and it digs in your emotions deeper as the days go by.
4. Decide On Your Options
Once you settle everything, it’s decision time. What will you do with your inheritance house? You have three options: you sell it, you rent it or you keep it for you or your loved ones.
Each of these options has its own pros and cons. There are considerations you want to do for every decision.
If You Plan on Selling
If you plan on selling, remember that you don’t get capital gains tax on any increase in property value. Capital gains calculate only the time of your ownership and the time you sell it.
For people who are not near the inheritance house, it’s best to use a real estate agent to handle the sale. Ask for advice on the value of doing home improvements vs selling as is. If you are inheriting property that did not have an update for years on end, small improvements go a long way.
Make sure to try and get the home repainted, repaired, and staged. Declutter as much as you can and make it presentable to anyone buying the home.
If You Plan On Renting It Out
If you plan on renting out the property when you inherit a house, you need a few things to consider. Location and home condition is vital, as a house in great condition near commerce is prime income. Consider hiring professional property managers to handle the rental process.
Make home inspections before doing anything else. Look for issues and correct them, especially any safety problems that might go out of your landlord insurance policy. Check for relevant city ordinances and make sure the law is there for you.
Consider if you can make it into a vacation rental or a BnB place. If there is rustic scenery nearby, this gives you more value than doing long-term rentals.
If You Plan On Moving In
Moving to an inheritance house has a few considerations. First, remember that your property tax will rise. If the home is too lavish for your lifestyle, consider if you have to sell it if the property tax is beyond you.
Get a home inspection and find out if there are safety issues that you need to correct. Look for any problems in the foundation, pests, water, and even roofing. Repair, renovate or remodel if you have to.
If you are inheriting property with siblings or other inheritors, you would need to settle with them. This can come in the form of rental payment or even a sale of their portion of the property.
Decide What To Do Once You Inherited A House
If you inherited a house, it’s best to be calm with the decision making. Weigh your options and see what is the best route to take. Whether you want to take it, rent it out or sell it off, you need to do the necessary prep work.
Are you looking for more housing tips? We have different tips and tricks that can help you wade through property ownership.