For starters, we are very sorry for you loss. We understand that this can be a very difficult time for you and your family, and owning a new property does not tend to make things any easier.
You might be thinking, “I just inherited a house, what should I do with it?” If you weren’t planning on having a property, you might be just trying to figure out if you should rent or sell it, and if so, how you would even go about doing that.
Well… there are plenty of options for you… and we would love to help you!
We are professional real estate investors in Bakersfield real estate, and we look to buy many houses every month in Bakersfield, California. We get calls all the time from people who want to sell their inherited house, so we decided to make a list of some tips that we think would be helpful for you during this process.
8 Next Steps After Inheriting a Property
Here are a few things to help you with this important decision:
1) Verify the Mortgage.
If you have just inherited a property, it is important to find out if there is still a mortgage left as soon as possible. If the house is not owned free and clear without a mortgage, then you are responsible to pay whatever mortgage is left to pay. Otherwise, your new property will fall into the foreclosure process very quickly.
Some banks allow you to simply assume the existing loan on the property, but some require a new refinance. If it is required, but you are not able to refinance the loan into your own name, renting the property out might not be a viable option for you and you may have to sell as soon as possible in order to avoid foreclosure.
2) Look Into Good Property Management.
Do you have a burning passion to fix toilets in the middle of the night and rescue tenants from being locked out at 3am, then property management is for you! Check out this article to find out more about what to expect from property management! If none of that sounds appealing, then it might be a good idea to hire a good property manager that will deal with those headaches for you.
Some people decide to rent their inherited house for extra income. While that is a great option for some, you will definitely want to think about how you will address the management part, otherwise it will be you tending to what is notoriously called tenants and toilets.
3) Ownership Can Be Expensive.
It is very unusual to find an inherited house that does not need significant repairs or updating. Typically houses that have been inherited have not been maintained, at least not in the recent past. If this is the case for you, you might want to consider hiring a property inspector to help you understand all the work that will be needed to restore the property and give you an estimated ballpark for the cost of those repairs.
Unless you are an expert in inspecting properties yourself, there can be many surprises that you will not recognize without a trained eye. It is usually better to be on the safe side and make sure you know what kind of situation you are looking at.
4) Selling for Full Market Value Isn’t Easy or Cheap.
Listing your property in as-is condition will not get you very much money, and it certainly is not worth the hassles involved. In order to truly get all the value possible out of your inherited property, you will need to do all the updates and repairs mentioned earlier. This takes time and, of course, a lot of money.
If you are in the position to afford spending the time and money to restore the property, this might be the best option for you. Renovating an inherited house in Bakersfield typically costs about $20,000-30,000. On top of that, it will probably take about 3-6 months to finish the work needed on the property, and probably much longer if you are not in Bakersfield.
Once things are in good order and ready to sell, the property will probably take another few months on the market to sell and close. After everything is said and done, it will cost tens of thousands of dollars and upwards of a year or more to finish everything. The process can be well worth it for those with the ability to go through this process, but many do not have the luxury.
If this doesn’t sound like a possibility to you, consider selling your property to Buyers of Bakersfield! We buy houses fast for cash in as-is condition so you don’t have to deal with any hassles!
5) Depending on the Market, Hold Your New Property Long Term
We would love to help you think through some of your options and determine if keeping your property might be the best choice! If you have the ability to make payments, or turn it into a rental, this might be a good opportunity for you to take advantage of long-term appreciation and equity. In normal people terms, that means the value of your property will typically rise over time and as the mortgage continues to be paid down, you will own more and more of the total value.
If you do not have an immediate need for the money, selling right away might not be the best option for you. Maybe you would want to consider refinancing or using the money to invest in more real estate. Inherited property doesn’t have to be a nightmare, it can be used for great investments.
6) Don’t Forget About Taxes.
You think the government would give up a chance to make a ton of money and let you take it all for yourself? Make sure to consult an account and/or attorney as soon as possible so they can guide you through the best options for you. Taxes can play a huge role in your decision, and you will definitely want to know all your options.
7) Consider Alternative Options.
Lease options, seller financing, subject-to. These may sound scary and complicated, but sometimes alternative options can end up being the most profitable for everyone involved! Do yourself a favor and call us to find out more! These have been some of the most lucrative deals we have ever seen, and not just for us. These options combine the best of renting and selling to give you the maximum benefit for your asset. Interested in learning more? Fill out a form or call us today at (661) 384-7021. We have experience that can help you win big!
8) Evaluate All Your Options.
We can help you find out how much money you’d make selling as-is, fixing up your property and listing it, renting the property, and more! We love helping people choose the best option for them, even if that means we don’t make money on it. Real estate is our passion, and helping people keeps us going. Find out how we can help you today!