When someone passes away, his or her house is generally left to a family member. Figuring out what to do after inheriting a house can be confusing and overwhelming, particularly when it is unexpected or when siblings become joint owners. People sometimes rush to make decisions, and sometimes, they put off making important choices. Either can lead to more financial costs and stress.
Find and Prevent Damage
If you’ve inherited a house, you should first assess its current condition. Have the house inspected by a professional so that you know what needs work and so you can make any necessary repairs. Next, contact the utility companies to have the accounts switched to your name. It’s also important to keep the heat and water turned on to avoid problems such as frozen pipes. In addition, keep the electricity working and have the yard maintained in order to avoid making it obvious that the house is unoccupied.
Clean Out the House
Invite family members to the house to take any items they want, provided they weren’t left to specific individuals in the will. Start with immediate family members, then branch out to allow others to choose things they would like. This can be an emotionally difficult task, but putting it off will prevent you from moving forward and deciding what to do with the house.
Move in, Sell or Rent?
If you want to move into the house, find out how much the mortgage (if any) and property taxes would be. If you and your siblings are joint owners of the house and one of you wants to live in the space, the future resident can buy out the others, pay them rent, or work out another arrangement.
If you decide to sell the house, you will need to pay taxes on any increase in value between the time of inheritance and the time of sale.
Renting is another option to consider. While you might be able to make money by renting out the property, you need to consider the potential costs that come with this option. In addition to being responsible for taxes and insurance, you would also be personally responsible for maintenance and repairs, unless you hired a property manager. Hiring someone to handle these tasks would cut into your profits, but it could also make renting the house less stressful. If you choose to rent the space, be prepared to thoroughly vet prospective tenants to avoid dealing with missed rent payments, damage and possible eviction proceedings.
Think Things Over Carefully
The death of a loved one is an emotionally painful experience that can leave people feeling overwhelmed and struggling to make decisions. If you’ve inherited a house, it has likely created a host of financial and emotional issues that you weren’t anticipating. Talk to your family and ask professionals for advice so that you can make the right choices.