When someone passes away, they generally have a will that includes inherited property to be given out to those who are named. Dealing with the passing of a loved one can be difficult, and while some find that inheriting property to be a blessing, it can also bring along some burdens.
When an individual inherits a property from a deceased loved one, there are three things that they can do with it:
- Move in
- Revert it to a rental
- Sell it
Each of these options can have their advantages and disadvantages, so it’s essential to look at each one in order to determine what will work for you.
Inherited Property Can Be a Blessing – Just Don’t Be Blindsided by the Costs Involved
Inherited property really can be a blessing for those who either want to keep property within the family or for someone who was looking to move anyways. One significant issue that people often run into is the fact that several costs can be involved in the entire process.
In the state of Pennsylvania, there is an inheritance tax. The percentage depending on the relationship of the heir to the decedent who passed are the following:
- 0% on transfers to the surviving spouse or a parent from a child 21 years of age or under
- 5% on transfers to those considered direct descendants and lineal heirs
- 12% on transfers to siblings
- 15% on transfers to other heirs, unless they are charitable organizations, institutions and government entities exempt from tax
- Any property owned jointly between spouses is exempt from inheritance tax.
In the city of Philadelphia, the number is slightly different when it comes to rates for Inheritance Tax. One significant difference is that the rate of tax imposed on transfers to or for a surviving spouse is based on the date of death.
Other Financial Issues
While many will focus their attention on the Inheritance Tax issue, several other financial issues could arise from inheriting property.
If you are considering selling the property, there is the chance of having to pay capital gains taxes. Of course, when either selling or renting the property, there are the costs that are involved in the process of updating and maintaining the property.
Selling could mean you have to update the property inside and out, so would renting. Other costs that would come with selling could also include enlisting the help of a real estate agent to help you through the entire process, while also budgeting for things such as staging, marketing, closing costs, and other related fees.
However, renting would also mean having to maintain the property and updating it as needed to follow any village or city regulations.
Deciding to live in the inherited property also means having to pay for updates that may need to be made while also having to add on any HOA fees, property taxes and so on.
Can’t Afford the Inherited Property? Here’s an Alternative…
While it may be heartbreaking to even think about, what if you can’t afford to keep the inherited property?
Selling, renting, and staying in it simply isn’t an option for everyone. One way to help alleviate the problem is to sell the property to a direct real estate investor.
Sure, we’ve all seen those “cash for home” signs in public settings, and while there are quite a few iBuyer scams out there, there are very qualified buyers out there that can offer you cash for your home.
To avoid those potential scams, all it takes is a little extra research on your part. You want to find individuals or companies who have a proven track record, preferably with consumer testimonials that you can refer to.
Once you’ve narrowed down your choices, talk numbers and see if they offer free quotes or walk-throughs before you must sign on any dotted line.
Take your time and vet all your options.
The Problem Property Pals Are Here to Help
We, at Problem Property Pals, are a team of real estate investing professionals who will not only offer you top dollar for your property, but we’ll also walk you through the entire process, step-by-step.
Seller’s turn to the Problem Property Pals for various reasons, including the fact that:
- We buy “as is” regardless of condition
- Sellers receive an all-cash offer quickly, often within an hour of us viewing your home
- The sellers are protected because we only close at a local, reliable title and escrow company
- You get top dollar for your property
- We handle everything following the sale, including repairs and dealing with other issues that may arise
If you are ready to get your fair cash price for your home, give us a call at (267) 244-9163. You can also fill out the form below so you’d know the best offer you can get when you sell your inherited property to us.