When you inherit a house, you may feel a mix of joy, sentimentality, and anxiety. While it might feel great to inherit a piece of your loved one and to have this valuable asset for your family, it can be hard to know what to do with an inherited house. Choosing how to handle an inherited house is a major financial decision that can be overwhelming for anyone.
When it comes down to it, you have three main options for how to handle an inherited house. You can move into it, rent it out, or sell it. The best of these three tends to be selling it and splitting up the proceeds with your loved one’s heirs. Let’s take an in-depth look at why doing this sooner rather than later is the simplest and most logical choice.
Inherited Homes Usually Need Some TLC
If you’ve just inherited a home from an elderly relative or a loved one who was ill, it might be in a state of disrepair. The previous homeowners may have been unable to keep up with the care and maintenance of the home because of their age or health. This makes the beneficiaries responsible for doing all of the necessary repairs to get the home ready to live in, rent out, or sell. These repairs tend to be costly and take a lot of time. The best option is to sell your house to a home investor who will buy it as it is. You won’t have to spend time and money on the repairs and the house will be in the hands of someone who can fix it up.
An Empty House is Costly
You may have inherited the house without an outstanding mortgage, but you still have to pay for it in other ways. As the house sits empty, you will need to pay for its property taxes, homeowners insurance, maintenance, and utilities. These expenses can take a toll on your finances. The longer you take to decide what to do with the house, the more these expenses will add up. Rather than allow the house to deteriorate over time without anyone living in it, you can sell your house quickly to house buyers.
Rental Properties Take Time and Money
Renting out your inherited house may seem like the best option, especially if more than one person is the heir to the house. You don’t want to live in it with a sibling or cousin, but you may not be prepared to sell it either. However, turning a home into a rental requires a significant amount of time, money, and effort. Being a landlord is a part-time job, not just a side hobby.
Not only will you still be financially responsible for the house, but you’ll have to make yourself available to your tenants for whatever they need. You’ll also face the challenge of having to find new tenants fairly frequently and if no one moves in, you’re dealing with the issues that come with an empty house. When you sell your house to home investors, you will no longer be financially responsible for the property and can spend your time and energy elsewhere.
You Can Capitalize on Tax Breaks
If you can quickly sell your house that you inherited, you won’t need to pay a capital gains tax. The tax basis of the property is brought to the current market value at the time of the previous homeowner’s death. Essentially, this means that you’ll inherit the house at fair market value at the date of death. The tax that you’ll owe when you sell the house will only be based on the increase in value that occurred while the house was in your hands. By quickly selling the house, there won’t be an increase in the value of the home and you won’t have to pay a capital gains tax.
If you and your family are overwhelmed with the task of caring for an inherited house in Philadelphia or even in Jenkintown, consider selling it. Doing nothing with it will only cost you in the long run and cause you stress. Sell your house to home investors who buy the house as is. You’ll get the value of the home, which is a better outcome than the estimated 75% of homes that sold for below asking price in 2019. Get the value of the house that you deserve and peace of mind knowing that the house is being used and taken care of.