Upon the death of a parent or other relatives, you might find yourself inheriting property. When this happens, you will have three choices; live in it, sell it, or rent it. Each option comes with its share of emotional, financial, and legal implications, which means you should take time to think critically before making a final decision.
Let us explore each option further.
Moving into an inherited property
Before moving into an inherited home, find out if the property has an outstanding mortgage. Usually, the outstanding mortgage is paid by the deceased’s remaining estate. If this is not the case, do you have enough money to take over the payments?
Even when the mortgage is fully paid, there are other costs to keep in mind. This includes utilities, homeowner’s insurance, property taxes and general upkeep.
Once you’ve calculated the expenses associated with moving into the property, ask yourself these questions:
Do you like the home?
Does the location suit your life?
Can you seriously see yourself living there?
Does the home suit your family's needs?
Renting out an inherited property
If you’ve inherited a home in a great location, you could consider renting it out to earn some extra income. The income generated can help pay off any outstanding mortgage on the home. Owning rental property also allows you to enjoy tax breaks and real estate appreciation.
However, renting out the home also means handling the demanding responsibilities of being a landlord. This includes tasks like finding tenants, preparing lease documents, collecting rent, handling repairs and maintenance, and resolving conflicts.
Selling an inherited property
Selling an inherited home would be a good idea in the following cases:
The property is in disrepair, and you don’t have the money or time to invest in it
You are sharing the inheritance with other family members
You cannot afford the upkeep and mortgage
The home is in another city and you don’t desire to relocate
If you choose to sell your inherited home in the current market, you are likely to make a handsome profit. According to the Canadian Real Estate Association (CREA), the national average home price rose by 25.9% year-over-year in June. Prices are expected to continue surging in the coming months.
Selling an inherited home can be very tricky, with many legal requirements to navigate along the way. Regalway Homes can help make the home sale process much easier. Get in touch with us.