As an heir to an Inherited property, I understand this difficult and emotional time… so before we start on helping you make a decision, our condolences to you and the family.
The next decision when you just inherited a property can be a tough one. There are a whole host of factors during probate and when you inherited a House. In this article, we won’t cover those problematic factors. We’ll focus today’s post on making a decision of renting or selling an inherited house in Southern California.
There are a few factors to consider, and they mainly have to do with your life situation and if your are ready for some of the required task. In either case, we hope this may guide you to the right decision.
We’re professional investors in Southern California, mainly in the san Bernardino county and Riverside county, and we buy houses with cash in The Inland Empire and our service to homeowners provides a fast, convenient, and reliable purchase, hassle-free. Every so often we get sellers who contact us about an inherited property they are looking to sell fast… so the information below provides some helpful points to guide to the right decision for your inherited house.
“I just inherited this house. What’s next?”
1) When’s there’s a mortgage and you want to keep it…
Getting a house without a mortgage would be awesome! That makes things a little easier. However, in situations where you still have a mortgage left, it makes it more difficult. You might have to pay the mortgage if you want to keep it; it depends on the bank’s policy. Some lenders will allow you to assume the mortgage, while others may want you to refinance. You’ll have to get in touch with the lender ASAP to verify what they require. If you don’t qualify for a new mortgage, renting it out may be the next option if you’re adamant on keeping the property
2) Managing an investment is more work than expected.
Dealing with brokers, handyman, general contractors, tenants, landlord laws, rent collection can be a hassle to deal with; a hassle that you may or may not want to go through. Some heirs who inherit a house love the idea of some extra monthly income. That’s a good strategy for building wealth and increasing income. Just be prepared to manage the rental and the work that can go along with tenants and repairs.
3) Rental ownership costs $$$.
Perfect house maintenance is rare. Most inherited properties need major repairs and upgrades.
Consider hiring an inspector or general contractor to give you a detailed report on what you’ll need to do to bring the house back up to par and the estimated repairs costs. The most important thing is budget for maintenance, repairs, vacancy, and capital expenses like the roof. Too many new landlords think that their profit is: Rent income – mortgage. But that formula will lead you to headaches. Maintenance costs 10% of the rent. Capital expenditures cost on average $250 a month. And vacancy is dependent on the area but usually 8-10% a month. Take these out of your rental income every month and place in a reserve. If all the deductions mean a negative income at the end, then you may want to reconsider keeping it.
4) When selling, people tend to forget the expensive selling costs.
If you don’t want to deal with making repairs, remodeling, and overall cleanup and trash hauling then you might want to consider us to purchase the house right off your hands. We buy houses in Inland Empire for cash and we pay for all the costs!
5) Taxes are guaranteed in life
More than anything else, get in touch with a legal and/or tax professional to give you advice and help on the issues of taxes. The tax system is complex, and can greatly reduce your net amount.
6) Compare your options.
After you know the numbers (value, net amount, repairs costs, rents,), its might be a good idea to sit and figure out what your overall goal is. Have you always wanted to be a landlord (make sure to budget in for repairs)? Would you rather have freedom from the work and get rid of it? Are you looking to get a large chunk of the equity by putting in the work and selling it on the market? After you determine your goal, jot down your numbers, do that math and see if the numbers fit your goal.
Just call us at 909-992-0148 or contact us here for more info
on how we can make you a fair cash offer on your inherited property today!
The post Renting or selling an inherited house in The Inland Empire? appeared first on VP Buys Houses.