Inheriting property sounds like a dream come true, but it has the potential to become your worst nightmare. Whether it’s a wonderful gift or a terrible curse depends on numerous factors, most relevant of which are the property’s condition, location, and the number of inheritors.
In many cases, inheritors opt to sell their new property, but that’s easier said than done. There are certain legal ramifications of inheritance that you should know.
This guide will tell you everything you need to know about what your options are if you just inherited property in South California. If you also decide to sell, we’ll give you all the information you need to sell safely.
Most often, you’ll hear people say that you have three options to choose from: rent the place, live there yourself, or sell the inherited property.
However, there’s also a fourth option in the play — leave the property empty most of the year and use it as a vacation home.
Before you decide to become a landlord, ask yourself if you’re really up to the task. Renting property isn’t just about collecting rent at the end of the month.
You still need to think about mortgages you might have inherited along with the property. Is the rent covering each mortgage rate or not? Will you pay up for landlord insurance and create a tenant policy or residential lease agreement?
Despite what you may think about renting, you need all of the above to protect you, the landlord, from irresponsible tenants. Finding a fair and serious tenant is truly amazing, but what’s your fallback in case they’re the opposite?
Finally, if your property just sits around for long, it might depreciate in value. If you plan to sell the property in the future, it’s perhaps best to do it right now.
You could just live in the inherited property yourself. It’s also quite a common solution, but you’ll need to take care of property taxes as well as utilities, repairs, and insurance.
Properties that are too old and/or rundown are a real money sink. You can just keep spending money on them, but they’ll just want more and more.
For property such as this one, the simplest solution is to sell it. You’re probably wondering who’s going to pay any money for your decrepit property. No matter who buys your home, they’ll lower the price to account for all the repairs they need to make.
Turning an inherited property into a vacation home is similar to moving into it. The only exception is that you’ll be paying less for utilities, while you’ll still have to cover property taxes and any potential mortgages.
You could rent the place for the rest of the year and then have it for yourself in summer or winter. In that case, all of the renting requirements we mentioned still apply.
Last but not least, selling your property might be the way to go. You get rid of all the expenses and responsibilities that come with inheriting a property, at least after you sell it.
If that sounds like something you would do, read on.
We’ll help you figure out if selling your home is right for you and how to get the most out of the whole ordeal.
Selling the property is the best solution for a couple of different scenarios.
If you’re not the only inheritor, which often happens to be the case, the only fair way to resolve the situation might be to sell the home. Dividing inherited property is often a painstaking process that strains the already fragile family relationships. For the sake of everyone involved, it’s best not to postpone selling the property.
Have you ever considered that you might actually inherit property in another state? What if you inherit a home in southern California while living on the other end of the US? All of the responsibilities tied to the property become even more tedious than they already are.
Finally, don’t forget the repairs. Combined with potential mortgages, you might have to invest in your home more than you are willing to. Luckily, there are always investors who can make (almost all) the problems disappear.
If you’ve inherited a home that’s been properly maintained, located in a desirable location, your problems are negligible. You can go through the usual channels that include realtors, wholesalers, investors, and direct buyers.
However, as you know, that’s usually not the case. More often than not, people inherit rundown properties that cost more money to repair than what most inheritors are capable of raising.
Repairs are, by far, one of the biggest reasons people pawn their inherited properties to someone else. When there are too many expenses, selling your own home or hiring realtors is going to be a nightmare.
You can sell the home to investors or direct buyers who take care of the repairs on their own. Both would be willing to pay a good price despite the current state of the property. Investors only care about the lot, while direct buyers know their way around repairs and can afford them.
You’ll have to decide what to do with the property you inherited. If you need a home to move in, that’s perfect. If you don’t, renting it for the whole year or only occasionally might be just fine.
However, if the property comes with too many strings attached, selling it could mean saving you from a lot of frustration and even more expenses. Just remember that if you really intend to sell it at some point, it’s best to do it as soon as possible. The last thing that you want is to end up with a depreciated property that could have been sold for more.