If you’ve recently inherited a property, you may be wondering what your next steps should be. What many people don’t realize is that inheriting a property can be a complex process, and there are some important considerations to keep in mind when deciding what to do with your newly acquired real estate.
Rent It, Sell It, or Keep It?
You’ll essentially have three options when you inherit a property. You can either rent it out for a profit, sell it for a profit, or keep it for yourself. Some people will choose the latter if the property has sentimental value, as they may choose to move into it for themselves or even pass it onto future generations.
Renting out a property may make sense if you don’t want to sell just yet, but would like to begin making a profit on it. However, selling is usually the most practical choice, as it allows you to get rid of the property (and therefore the responsibilities that come along with it) while pocketing some of the profits.
Other Factors to Consider
Before you decide what to do with your inherited property, make sure you understand your financial obligations. For example, you’ll want to take time to research the mortgage on the property; has it already been paid off or are there still payments to be made? What about property taxes? If these have not yet been paid, you may be responsible for getting them caught up. And of course, should you choose to sell the property, you may also be subjected to capital gains taxes—though this will depend on how much the property is worth and how much you end up selling it for.
Finally, if the property has been partially inherited by other family members, you’ll need to reach a joint agreement on what to do next.
Inheriting a property can be a nice surprise, but it can also create some logistical and financial challenges you may not anticipate. For help navigating this new terrain, contact our team at Shield Property Management & Sales today.Contact us