You inherited a property. It happens every day, with people inheriting property from a trust or through a will.
Before you do anything else, make sure you understand your tax implications, such as federal inheritance taxes or state property taxes. Once you get those legal niceties out of the way, though, you face a pressing question.
What should or can you do with your new property? Fortunately, you have several options available to you. Keep reading for some of the top choices people make with inherited property.
If the property is conveniently located and unoccupied, you may decide to move in and live there. It’s one way you can upgrade your home or downsize to a smaller home, depending on the property. If you already own a home you like, though, moving in is often off the table.
Rent It Out
What if the house was occupied before and you want to rent it out as a passive income generator. In that case, you’ll want help from a property management company like Nomadicrealestate.com. These kinds of companies deal with day-to-day management issues, like rent collection and dealing with repairs and service calls.
Sometimes, people inherit a rental property. If you just got through inheriting a rental property with someone living in it, it may end up a lucky stroke. Finding good tenants can prove a struggle for new property owners. In that case, a property management company may already run it.
If not, you must decide if you’ll take over running the operation or outsource that work.
It’s not uncommon for people to inherit property in a different part of the country from where they live. That makes it difficult for you to deal with the property. In cases like that, it’s often easiest to take a week or two, clear out the personal property, and list it for sale with a real estate agent.
After that, the real estate agent does most of the work. You might need to go out one more time to sign the paperwork, but it’s a small price to pay.
Some properties aren’t ready to go straight on the market. Maybe it needs some minor renovations or you must undo accommodations for the elderly relative who lived there. If you live locally, you can take on the minor renovations and then sell the property yourself.
You can also hand off the selling to a real estate agent. If you sell, you may also owe capital gains tax.
What To Do When You Inherited a Property
A person who inherits property is lucky and unlucky. You’re lucky to have inherited a property because it’s a new asset. You’re unlucky because it will take work to deal with the property.
The amount of work will depend in part on what you do with it. You can offload some of that work onto a real estate agent or property management company if you decide to rent or sell the property. If you move in, the work is almost all on you.
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