Options for an Inherited Property

by Robin Anderson Real Estate 12/06/2020

Image by Annalise Batista from Pixabay

One of the basic things that people prepare for in their end of life planning is their property. A family home, for example, is often passed down to the couple's children or next of kin. Often, though, the people who inherit the property don't think about what they'll do with the home once that happens. 

If you've inherited a property but there are no advanced directives attached, there are a few options.

Options for an Inherited Property

Every family is different. If the property has been lefts to siblings or multiple family members equally, you'll need to be in agreement as to how the property is managed. Ideally, all parties will reach an amicable agreement but you can also enter into mediation to make sure everyone's best interest is met and the asset is fairly divided.

The state of the home at the time you inherit it is an important factor. There may still be a mortgage or a reverse mortgage on the home, and those payments will need to be taken up immediately. 

There are three basic options for an inherited property:

  • Sell It. Selling the property can make the most sense when there are multiple beneficiaries. The taxes are often minimal because there's a step-up tax on inherited properties, which means that the property is valued at what it's worth when you inherit, not what it was worth when your parents purchased it. If you've decided to sell, you want to assess the house and make any repairs necessary or decide to sell as is. The second option will often mean that the home will sell for less than is possible in the market, but that may be a better option if the repairs are extensive. Once the house sells, the siblings can divide the total amount and the process is complete.
  • Move In. Sometimes one of the siblings would like to move into the family home as their residence. This means that the new owner needs to pay the other beneficiaries for their portion of the estate. There are different ways that you can finance this — through a traditional mortgage or through private payments to the other beneficiaries. You'll need to assess the house to determine fair value at the time of the transaction so that all parties receive their fair share.
  • Rent It. Some people prefer to keep their family home in the family but all the siblings have their own residence. You might choose to rent it out as an investment property. This will mean managing the property for repairs and the work entailed in finding renters. This option can be an excellent way to generate income, while paying monthly bills associated with the property.

An inherited property can offer a great blessing in financial gain, but it can also be a good deal of work. If your decision is to keep or rent out the property, make sure all parties are on board for the level of commitment that means to save yourself from tension in the future.

About the Author
Author

Robin Anderson Real Estate

“My Passion is people and relationships and I promise to provide my clients with exceptional service tailored to their individual needs.” -Robin Anderson 

Georgia native, Robin Anderson brings her passion for people and her love of homes to work for her clients. She and her husband, Andy, have been married for over 30 years and have two adult children, Ellen and Drew. They currently live in Fulton County, but Robin has lived and invested in properties throughout metro Atlanta as well as helped clients buy and sell. She has been integral to many real estate endeavors including designing and building several custom homes, remodeling homes, subdividing land, managing rental properties, and buying and selling properties. She spent her first 3 years in real estate working with a new home builder, and she has spent the last 6 years working with buyers and sellers in her own community. Robin is highly motivated but sensitive to the fact that buying and selling homes can be an emotional experience, so she makes it a priority to keep clients closely informed throughout the process and strives to produce quick results. She appreciates the opportunity to help her clients navigate the real estate process, and she aspires to deliver quality customer service that is both informative and positive. She is driven to provide outstanding service for her clients and she is focused on building successful and lasting relationships with her clients. This personalized service earns her enthusiastic referrals from clients she is pleased to call friends.Edit

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