I Inherited a House…Now What?
We are a local company in Salt Lake City UT established in 2009, and we’re looking to buy several houses each month in the Salt Lake, Davis, Utah and Weber County areas. Every month we get calls from those who have inherited a house and are looking to sell the house. The information below are some tips to help you navigate the process. We will buy the house as is – exactly as it sits right now, or we will offer other solutions that may work better for you such as renting or selling with an agent. Repairs, family living in the house, behind in payments…are all OK. We truly ❤️ questions, so please call or text 801-382-9199 today and ask your questions.
I Inherited A House and Have Questions
There are so many different situations that go along with an inherited house. Does the house need a lot of work? Is it sitting vacant? Are there family members or tenants living in the house? Are there liens against the house or maybe a reverse mortgage? Is the house currently in probate?
Here’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. Most banks will allow you to keep making the payments on the house. This way you can rent the house or take your time doing things related to the house. Sometimes the same is owed on the house as what the house is worth. WE CAN STILL BUY the house and get you some money in most situations.
If you inherited a house with a reverse mortgage, most likely the mortgage will need to be paid off by the estate. A mortgage company will typically give you 6 months to sell the house if there is a reverse mortgage. The reverse mortgage company can also foreclose on the property if the estate does not sell the house.
2) The investment is only as good as the manager.
If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t the best use of your time, hire a professional to help you or cash out now. 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. I would suggest a good property manager that will cost you about 10% of your rent to manage the property for you. As long as there is enough cash flow, there should be no hassle involved in renting the house.
Please call Gary today at 801-382-9199 with any questions.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most people that inherited a house have a house that needs improvements or repairs. Even if house is just dated but in good livable condition, major issues such as heating, electrical, roof, plumbing, air conditioning and more can cost a lot of money over time.
Consider hiring a professional property inspector to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive.
Adding to costs are things like the mortgage payment, property taxes, income tax if you rent the house and insurance.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy houses in Utah for cash, as-is even if there is a tenant or family member living in the home. We can give them time to move and even help them move or rent the house back to them.
Part of our company mission statement says, “To deliver home selling solutions that create a win win situation where customers truly benefit from our services.”
We truly want to help people that have inherited a house no matter if they work with us or not.
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 and manage a rental property.
6) Uncle Sam wants a piece of the action.
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. Most of the time there is little or no tax due when you sell an inherited property that was a primary residence. Ask your tax professional to make sure. If you inherited a house that needs a lot of work done to it, those costs will probably offset the sales price of the house.
7) Consider all your 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. So you can sell the house and still live in the house. These kinds of deals can be complicated, but our LOCAL Salt Lake City investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Salt Lake City – 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). We love to answer your questions when you have inherited a house.