I Inherited a House, What To Do? – Should I Rent or Sell in Phoenix?

First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times.

You’re thinking, “I inherited a house, what to do with this house?” Should I rent it? Should I sell it?  How should I sell it?

Tons of options open for you, but…

… we can help.

We’re seasoned investors in Phoenix real estate, and we’re looking to buy several houses each month in the Phoenix AZ area. Every month we get calls from those who have inherited a house and are looking to sell the house… so the info below are some tips to help you navigate the process.

I Inherited A House, What To Do Next?

Here’s a few important considerations to help you make the right decision:

Observe Your State’s Waiting Period

The loss of a loved one can be an emotional time, so you shouldn’t rush any decisions about property you’ve inherited. In fact, you might be forced to wait if you want to sell unwanted property. For example, “in Arizona, usually there is a 90-day waiting period before a home can be sold,” said Michael Zschunke, a Realtor in the Phoenix area who sells inherited properties. He recommends working with an attorney and real estate professional to evaluate your options before taking any action.

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. If you don’t qualify for a new loan, renting may not be an option for you.

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.

3) Property ownership costs money.

It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements.

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.

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 Phoenix 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) 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.

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. These kinds of deals can be complicated, but our Phoenix investment experience can help you win.

8) Compare a few scenarios.

We’ll help you determine prices for any property near Phoenix – 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).

Sell As-Is at Auction

If your goal is to sell your inherited property quickly, Goff said you could unload it at auction. You might not get as good of a price as you would by listing it with a realtor. But you can save yourself some of the hassles of making it appeal to buyers by selling it as-is at auction.

Sell the Property to an Investor

Selling unwanted inherited property to a real estate investor is another quick way to make money without having to spend your time and money to prepare the property for sale. “An investor will buy your home ‘as-is,’ allowing you to walk away from the property without making any repairs,” said Shawn Breyer, owner of Breyer Home Buyers in Atlanta. “Some investors will even let you sell without cleaning out the inherited house. You can keep what you want and leave the rest.”

… But Make Sure They’re Experienced

www.cowleyhomebuyers.com 

That said, Breyer recommends that you work with an investor that has experience with buying inherited homes that must go through the probate process. “They will be able to guide you through the process so that you do not encounter any hiccups,” he said.

Rent the Property to Others

If the property you inherit is in good condition, you could turn it into rental property to create a stream of passive income. However, the rental income might not be that passive if you plan to manage the property yourself, said Goff, who owns 10 long-term rental properties. “There’s a learning curve to it.”

Hire Professionals To Manage Your Rental Property

If you don’t have time to deal with tenants or if the property is in another state, Goff recommends using a management company to oversee the rental property. Expect to pay a management company about 10 percent of your rental income, he said.

Fix Up the Property and Flip It

If you inherit property that isn’t in good condition, you could take advantage of the opportunity to fix it up and flip it for a profit. You stand to make the most money if you’re the DIY type and can renovate the property on your own.

… But Remember Capital Gains Tax

If you live in the property you’re flipping for at least two years before you sell it, up to $250,000 of the profit is tax-free if you’re single, and $500,000 in profit is tax-free if you’re married and file taxes jointly, Goff said. Otherwise, you’ll have to pay capital gains tax of up to 20% on the profit.

Just call us today at (480) 744-5941 or contact us now for more information
on how we can make you a fair cash offer on your inherited house today!

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

Get An Offer Today, Sell In A Matter Of Days...

  • This field is for validation purposes and should be left unchanged.

Leave a Reply

Your email address will not be published. Required fields are marked *