Inheriting a home or property can be both exciting and anxiety provoking. It’s a new responsibility that you might not have experience with and it can be confusing if you don’t know all of the steps to take. One of the very first things that need to be done is to update the homeowner’s insurance policy, which can lapse if the house is not occupied. You’ll want to make sure coverage continues by contacting the insurance company and making any necessary changes to the policy.
The next thing you’ll want to do is track down all of the utility accounts for that particular property. Cancel those that are not needed, and make sure the bills are paid each month on the others. No matter what you’re planning to do with the house — or until you decide — you probably don’t want the lights to go dark or for there to be no heat or running water. You might need to arrange for yard upkeep as well. Also, make sure you’re keeping current with property tax payments and any mortgage on the property.
A big decision for people that inherit property is whether they are leaning toward selling, renting or living in the house, and what to do with all of the contents inside the house. Putting off what can be the painful task of going through a parent’s belongings causes many inherited homes to be suspended in time, sometimes for years. But not taking action costs you, both financially and emotionally. It’s expensive to maintain the upkeep on a house that you aren’t occupying, so the sooner you deal with it, the better.
If you decide to sell the property, meeting with a financial advisor and a real estate broker will help you iron out the details of the sale. Ask your real estate agent his or her opinion on investing in renovations versus selling as-is. There are many avenues to take with either decision.
Renting the home out is also an option many people explore when they’ve inherited a home. This can be beneficial in many ways but also puts the task of managing the property in your hands. To minimize hassle and potentially costly mistakes, consider hiring a professional property manager to handle the marketing, leasing, and managing. Depending on the location and condition of the home, renting it could be a source of income for you, so this might be a great option vs. selling the property.
The third option is to move into the home that you’ve inherited. Perhaps the home is in a neighborhood that you love, or you just aren’t ready to sell or rent the home. This could give you a chance to go through the contents of the house at your own leisure instead of frantically trying to get through it prior to selling right away. Keep in mind, moving in may mean an increase in property taxes for you. Not only will the house be worth more than before, because of the stepped-up value, but any special property tax break for senior citizens (if you’ve inherited the home from an older person, like a parent) may disappear. You’ll have to qualify on your own for such treatment.
Regardless of how you choose to deal with the inherited property, recognizing that it is both a blessing and a curse, will help you understand the complexities. Knowing your options and seeking out knowledgeable resources will save you time and money.