First, we’re so sorry for your loss. If you’ve just inherited a house, then dealing with property ownership can be challenging on top of dealing with the loss of a loved one.
You’re thinking, “I inherited a house, what should I do with this house?” Should I rent it? Should I sell it? How should I sell it?
Tons of options are open for you, but…
… we can help.
We’re seasoned investors in Dallas / Fort Worth real estate, and we’re looking to buy several houses each month in the Dallas / Fort Worth TX area. Every month we get calls from those who have inherited a house and are looking to sell the house or property… so we’re going to provide some tips below to help you navigate the process. Let’s dive in…
I Inherited A House, What To Do Next?
Here’s a few important things to consider so that you can make the best decision possible:
1) Make sure the mortgage is paid.
This really should be the first thing you figure out when you’ve inherited a house or land. I know, it may sound obvious, but if the person who left you the property also had a mortgage (unless it had no mortgage and was paid off, which is great!), it will now be your responsibility to pay the mortgage (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, then renting it out may not be an option at all.
2) The investment is only as good as the manager.
Let’s say you’re able to become a landlord and rent out the property to tenants, then dealing with brokers, property maintenance, tenants, rent collection and all the nuances of property management will now become your responsibility. Even if you hire a property manager, you’re still ultimately responsible if something goes wrong. Some people who inherit homes decide to keep the house and rent it for extra income. That can be a great strategy for sure. Just make sure that you do your homework ahead of time and know exactly what you’re getting into. You’ll need to be prepared to manage the property and all the hassles that can go along with tenants and toilets. 🙂
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need some major improvements. And when we say major improvements, we’re talking about an old roof, leaky plumbing, an aging HVAC, dated electrical panels, an old hot water heater, structural issues, etc. etc.
Consider hiring a professional property inspector, if you’ve inherited a house, that can give you a detailed rundown on what you’ll need to do repair or replace within the next five years, along with the estimated costs. Surprises can be very, very expensive. So if you know ahead of time, then you can plan accordingly and have the money needed to take care of those expenses as they come.
4) Selling a property for top dollar costs money.
Yes, you can try to sell your property for top dollar, but most home buyers will only pay top dollar if the house is in tip top shape. If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. There’s another solution that you might not be aware of. You can sell your home to an investor like Madison Lea Homes. We buy Dallas / Fort Worth houses for cash, as-is, and can close on your time schedule. We have our own crews and can make whatever updates or repairs that are needed after closing. We won’t be able to pay top dollar because we’ll have to invest a chunk into the property to get it up to par, but we can save you a lot of time, money, and stress to take it off your hands sooner than later.
5) If the market continues to grow faster than your other options, then hang onto the investment.
We can help you analyze the value of your property today versus the long-term benefits of renting it out. If you can use the equity in your property in another way that outpaces the performance of the real estate market, then 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.
If you’ve inherited a house, don’t forget to discuss your inheritance with tax and legal professionals before you take any action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment. Knowing about these things ahead of time can be very helpful!
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 Dallas / Fort Worth investment experience can help you win.
8) Compare a few scenarios.
At Madison Lea Homes, we can help you determine prices for any property near Dallas / Fort Worth – 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 associated costs).