Hello World! Welcome Friend! Have you recently inherited a home from a loved one? An inherited home is an extremely generous gift. That being said, a home inheritance also kicks off a process that is riddled with emotion and confusion. This is because most people have no idea what to do when inheriting a home. And, seeing as the property was given to you by a loved one, deciding what to do with an inherited house can feel all the more overwhelming. So, what are your options if you inherit a house? You can sell inherited property for cash, or you could renovate it and keep it in your possession for the future. There are plenty of choices and paths to take, so check out this guide to find out what the best thing for you may be.
Take Care of Housekeeping Tasks
When you inherit a home, you basically have three options. You can either sell it, rent it out, or move into it.
However, deciding which option is best can take some time. That’s why in the meantime, you need to make sure you’re taking care of some basic housekeeping tasks in regards to your inherited home. Here’s what you need to do:
Update Homeowners Insurance Policy
The first thing you’ll want to do is to update the homeowner’s insurance policy. This can easily lapse if the home is left unoccupied, so it’s very important that you get on this right away.
Contact the insurance company to make sure that coverage continues, and make any necessary changes that need to be made.
You’ll also want to track down all utility accounts. Cancel the ones that aren’t needed, and then make sure the bills get paid each month.
Also, make sure you keep up with the mortgage and any current property tax payments.
You don’t want the lights to go dark or for the heat to stop working while you’re deciding what to do with the house, so make sure to stay on top of these tasks.
Go Through the Home
As painful as it can be, you’ll eventually have to go through the home to sort through your loved one’s things and decide what to do with them.
In order to prevent the process from becoming too overwhelming (both emotionally and physically), you should go through the house room by room.
Take the time you need to laugh, cry, and reminisce.
If your loved one left a will, you’ll want to make sure to check it while going through the home. You can also check larger items for markings that your loved one may have left that will signify what to do with it.
Otherwise, you can separate everything into three piles: keep, discard, and donate.
Also, if renting out the home or moving in is on your mind, you may want to consider leaving larger appliances and pieces of furniture in the home for the time being.
Taxes
No one likes to talk about taxes, but it’s a subject that can’t be avoided when inheriting a home.
While inheriting a home in and of itself does not trigger any tax liability, what you decide to do with it can. You should check out an online tax calculator for help.
For example, if you choose to sell the home, then you’ll have to pay capital gains taxes. However, when you inherit a home, you’ll be protected from the majority of capital gains taxes.
Also, when you inherit a home, you’ll benefit from the step-up tax basis. This means on the date of inheritance, you’ll inherit the home at fair market value. Then, if you choose to sell it, you’ll only be taxed on the gains between when you inherit it and when yo;u sell it.
Rent, Sell, or Move-In: What Should You Do When Inheriting?
Now that you know about taxes and other housekeeping tasks, let’s talk about your options for your inherited home: selling, renting, or moving in. Let’s take a closer look at each one and what you need to keep in mind with each option.
Renting
Renting out an inherited home is a great way to generate some extra income. And, if you rent it out as a vacation home, then you and your family can still spend some time there. You may even want to consider hosting large family celebrations there.
However, remember that renting out a home means you’ll have to take on all the duties of a landlord. And, if you don’t live nearby, you’ll then have to hire a property manager.
However, while a property manager costs money, they can be of huge help when it comes to marketing, leasing, and maintaining the place.
Whether you decide to rent it out as a vacation home or rent it out year-round, make sure you do a thorough inspection of the place beforehand to assess any damages. And, make sure you properly screen rental candidates.
Moving In
Moving into an inherited home can be a great idea. However, you have to make sure you get this cleared with your other siblings and family members before you decide.
Otherwise, the decision to move in can lead to some nasty fights. In fact, if you inherited the home jointly with your siblings, by law, they’ll need to be compensated if you plan to move in without them. Compensation often exists in the form of rental payments.
Also, if you move in, expect your property taxes to rise.
Lastly, make sure to have the home inspected before you move in. This will clue you in on any safety issues or maintenance issues.
Selling
Last but not least, you can sell your inherited property.
Selling an inherited property is a great option if the house has significantly appreciated in value. Also, don’t forget that with step-up taxes, you’ll be able to avoid a large portion of capital gains taxes by selling your home.
However, if you choose to sell the home, make sure you hire a real estate agent if you don’t live in the area. And, expect to make small improvements to the home so you can get a better offer. This is especially important if you’re looking at selling an inherited house fast, as the offer will typically be higher if the house is in a better state.
What Will You Do With Your Inherited Home?
As you can see, you have a lot of options when inheriting a home, and each option offers its own benefits and drawbacks.
So, give yourself some time to decide what you want to do with your inherited home, and make sure to keep up with the housekeeping tasks in the meantime.
And, be sure to keep browsing our blog for more lifestyle tips and tricks.
Click the links below for any posts you have missed:
A Complete List of the Best Humidifiers for Your Home
Don’t Fall Into too Much of a Routine
What You Need to Know about Air Conditioning Repair
5 Ways to Stabilize Soil and Prevent Erosion on Your Property
Engineered Timber Flooring or Solid Wood Flooring: What’s the Best for Your Home?
Wise Advice on Money – from Celebs to Entrepreneurs
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