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? These are important questions, and there are many factors to consider as you make your decision.
Tons of options open for you, but…
… we can help.
We’re seasoned investors in Milwaukee real estate, and we’re looking to buy several houses each month in the Milwaukee WI 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:
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, consider hiring a professional property management company or consider cashing out now. Professional managers can save you time and money by handling these tasks efficiently. Some people who inherit homes decide to keep the house and rent it for extra income, which can be a great strategy. However, be prepared to manage the property and the hassles that come with tenants and maintenance. If this doesn’t appeal to you, selling might be a better option.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained, and most inherited houses need major improvements.
Hiring a professional property inspector can provide you with a detailed report on necessary repairs and estimated costs over the next five years. This step can help you avoid costly surprises and make informed decisions about whether to keep or sell the property.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 Milwaukee houses for cash, as-is.
5) If the market will continue to grow faster than your other options, hang on to the investment.
Analyzing the value of your property today versus the long-term benefits of renting can be complex. We can assist with this analysis, but you might also consider consulting with a real estate financial advisor. Understanding local market trends and future growth potential is crucial. If you can leverage the equity in your property in a way that outpaces the real estate market’s performance, it may be worth considering. However, if the neighborhood is appreciating in value and you don’t have immediate alternative uses for the funds, holding onto the property could be a wise investment. Real estate can yield significant returns if you understand market dynamics and trends.
6) Uncle Sam wants a piece of the action.
It’s crucial to discuss your inheritance with tax and legal professionals before making any decisions. There are significant property and income tax consequences that can dramatically impact the cost of owning your investment. You can find more detailed information on inheritance taxes from the IRS website. Additionally, consulting with a local tax advisor or a legal professional can provide you with tailored advice based on your specific situation. The American Bar Association is a good resource to find qualified legal help.
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, so it’s beneficial to have experienced guidance. Our extensive experience in Madison and Milwaukee real estate can help you navigate these options. For more impartial advice, you might also consider consulting with a real estate agent or financial advisor to explore all possible scenarios. The National Association of Realtors and Financial Planning Association are excellent resources to start with.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Appleton – 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).