Many people who inherit homes consider becoming landlords, however, they don’t necessarily know exactly what being a “landlord” entails – but may think it is the best option….Or, is it? After all, they can supplement their income and keep the inherited property. Sort of like having your cake and eating it too! However, before deciding to rent out an inherited home, there are many things to consider;
- the legalities of being a Landlord
- The extreme “wear and tear” tenants cause to rental homes
- Market Timing – Is now the best time to sell or to hold the inherited home?
- What is the true cost – after all is said and done – of being a landlord?
- Would you rather just sell the house and avoid possible headaches?
Renting out an inherited home can be an exciting new opportunity for some, while it can be a money pit and a headached for others.
Why Rent Out an Inherited Home?
When you discover you are inheriting a home, you have a few options. You can:
- Occupy the home
- Sell the home
- Rent the home
There a number of reasons people choose to disclaim, sell, or rent out a home. They may already have a house, the home may be underwater or require extensive (and often expensive) repairs, or the taxes and mortgage may simply be beyond the person’s budget. Finally, there may a dispute among siblings about the house and renting it could be way of appeasing all parties involved, and making a little extra income in the process. Of course, there are definitely pros and cons to this route. You should weigh them both carefully before deciding to rent the property out to prospective tenants.
The Pros of Renting Out an Inherited Home
The potential benefits of renting out an inherited home include:
- You can supplement your income
- You can often write-off repairs and expenses
- You can have time to wait for the market to improve before selling without the house sitting empty
The Cons of Renting Out an Inherited Home
The potential disadvantages of renting out an inherited home include:
- You may be forced to refinance the home in your name
- You will be responsible for any repairs to damage done by tenants
- You may be required to pay a higher property tax rate
- Eviction can be a costly and time consuming process
Can I Sell an Inherited Home?
Yes. In fact, many people choose to sell an inherited home to avoid the issue of property taxes or mortgage payments. Others may just have no need for an additional home or wish to settle a dispute with siblings over ownership of the home. Once the probate process has ended and the home belongs to you, you can sell the home with the help of a real estate agent or via short sale, which is faster and involves selling the home for the amount owed or at a reduced price. You can also sell the house while it is still in probate, hut this will involve a number of additional fees and court costs. If you think you may be interested in selling a home, you can contact Elite Home Offer to request a cash offer. We’re happy to answer any questions you may have about the process of selling a home.