First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is not easy.
If you are thinking “I inherited a house, what to do now?” Should I rent it? Should I sell it? How should I sell it?
There are several options open for you, but…
… we can help.
At Dolfin RGV we are local investors in McAllen real estate, and we’re looking to buy some houses each month in the McAllen TX area. Every month we get calls from those who have inherited a house and are looking to sell the house… so we included for you some tips to help you navigate the process.
I Inherited A House, What To Do Now?
These are some important issues to consider in order to make the best decision:
1) Is the mortgage paid?
The first question that will arise is to check if the mortgage has been paid off or if there are still payments pending to the lender. If there is a loan, you need to keep up making payments to the lender.
Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. They will have to check up your credit score, income, etc. and if you don’t qualify for a new loan, renting may not be an option for you.
2) Ready to be a 24/7 manager?
Being a property owner will translate in dealing with tenants, keeping on top of the taxes, maintaining the property (never fails – you receive those phone calls about a leaking faucet or broken A/C in the middle of the night or on the weekend), rent collection, showing the property to potential tenants, etc. If you do not have the time or don’t want the hassle you may hire a property management but that will cost you extra. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets.
3) Property ownership costs money.
Althoug many houses are nicely maintained, many inherited properties are older and need extensive repairs to bring them up to date.
Consider paying a profesional inpection to find out all the details on what you’ll need to fix within the next five years, and get quotes to come up with estimated costs of keeping up the house. Surprises can become quite expensive.
4) Getting top dollar for your house will cost money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy McAllen houses for cash, as-is.
5) If the market will continue to grow faster than your other options, hang on to the investment.
We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your property in another way that outpaces the performance of the real estate market, you should. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on – real estate can be a great investment if you know how to correctly read the market.
6) Check out the tax situation.
Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.
7) What are my options?
In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our McAllen investment experience can help you win.
8) Compare different scenarios.
We’ll help you determine prices for any property near McAllen – if you sold it today without doing any work, the highest price the market will bear, and the projected value of keeping it as a rental (along with the costs).