What To Do After You Inherit Property – How To Guide
Here’s a practical guide on exactly what to do after you inherit property.
Inheriting property often causes people at least some amount of stress, whether it’s because they don’t know what to do, or because there is a lot of emotion attached to the property, or both. Here’s 4 steps on what to do after you inherit a property to make sure good ol’ Uncle Sam doesn’t take a huge cut, and most importantly, to make sure you make the best decision for you and your family.
Unfortunately, sometimes inheritances can leave siblings or other heirs in conflict. That being said, following these steps will allow you to be confident you’re making the most rational decision possible.
So, let’s dive in! Here’s what to do when you inherit property:
1. Contact a tax professional. We’re not CPA’s, but we’re no strangers to paying taxes. Make sure you contact a professional to assess your potential tax liability. We’ve written another article that briefly explains this here.
2. Assess condition of the property. This is important to do as soon as possible because this will help you determine what the right strategy is for your situation. If you live out of the area, hire someone to take pictures. There are plenty of services that will help you do this, like real estate photographers, Realtors (don’t call a Realtor unless you plan on listing it and paying the 6% commission), or a local home buyer to assess the condition for you. Then, compare the condition to the other active real estate listings in the area to determine what you need to update or repair.
3. Assess the local market. This one is easier than it sounds. Check websites like www.rentometer.com to find out how much the property will rent for, if that’s an option you’re considering. Also, a simple look on active rentals can help you determine what the market is doing. If you see a lot of “Free Rent”, “Bad Credit OK” type of marketing, you’re probably in a relatively weaker rental market. If you’re looking to sell, check redfin.com, zillow.com and trulia.com to help you assess the market value. (Make sure you pick properties to assess value that are in similar condition to the property.)
4. If you’re selling it, determine if selling it yourself or using a Realtor is the best route. Want to know a secret? If your property is not in good shape, a lot of Realtors actually call cash buyers to put in offers (just like Quick Home Offers). So if the property is in bad shape, you can save yourself some money and time by selling to someone who plans to spend the time and money to fix it. If you’re a DIY type, then you can probably earn yourself some money by fixing it yourself.
If your property is in great shape and has been updated, the best route for you to take is listing it with a Realtor. Often times, this will get you more money than selling to an investor. But remember, make sure your property is in good shape before you call a Realtor. Otherwise you might just be wasting money!
What to do after you inherit property? Often times this question can be confusing at first, but looking at it one step at a time it’s simple, isn’t it?
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