I Inherited a House, What To Do? – Should I Rent or Sell in Pensacola?

I Inherited a House, What To Do? – Should I Rent or Sell in Pensacola?

First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times. If you inherited a house and you have repairs needed. It can be challenging to have an expense that you didn’t have before. Anyone who inherited a house before will know exactly what I mean. The costs for taxes, insurance, maintenance can be difficult for the heirs to inherit an expense they didn’t have once.

You’re thinking, “I inherited a house, what to do with this house?” Should I rent it? Should I sell it?  How should I sell it?

Tons of options open for you, but…

… we can help.

We’re seasoned investors in Pensacola real estate, and we’re looking to buy several houses each month in the Pensacola Florida area. Every month we get calls from those who have inherited a house and are looking to sell the house… so the info below are some tips to help you navigate the process.

I Inherited A House, What To Do Next?

Here’s a few important considerations to help you make the right decision. But first, You always want to take a few days to get yourself together if the loss happens recently. The pain can cause us to take random decisions that might not be for our own best interests. Always take your time if you’re in that position if you can. In some cases like foreclosure, tax deed sale, moving. Time is of the essence and you need to take quicker actions. But below is what to do next if you inherited a house.

1) Make sure the mortgage is paid.

This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, renting may not be an option for you.

But most banks allow relatives heirs to assume the current mortgage the deceased had. If the loved one had a mortgage with a good rate. You need to assume that mortgage and don’t open a new mortgage. Because if the bank allow you to assume the mortgage with the low rate the deceased had, it wouldn’t be a smart choice to open a new mortgage with higher rate. This is wouldn’t benefit you to pay a higher rate, however, it will benefit the bank instead to charge you with higher interest rate.

2) The investment is only as good as the manager.

If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t the best use of your time, hire a professional to help you or cash out now.  Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets.

3) Property ownership costs money.

It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements.

Consider hiring a professional property inspector to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive. Unlike other inflations in the country. We have seen in the past few years how inflation impacted the economy in the US. However, Real estate and houses takes the biggest inflation jumps when it comes to inflation with labors and materials.

In 2021 and the plywood jumped to a $70 a piece which was only half of that a year before. If you inherited a house in Pensacola, Florida or anywhere nationwide. Remember that inflation for repairs can impact your affordability to do any repairs in the future.

4) Selling a property AS-IS Without making repairs

If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. You can always rely on a trusted home buyer company like Quality Properties Of Northwest Florida LLC. We buy Pensacola houses for cash in AS-IS condition. But you might ask what’s the catch?!

There’s no catch and I will explain to you why. It’s really simple but this is what to expect with all the transparency in the world.

If you inherited a house and you want to sell it to a trusted and reliable home buyer company like Quality Properties Of Northwest Florida LLC. You need to understand that we’re real estate investment company. But what does that mean to you as a homeowner who inherited a house and want to sell it? It means that we’re going to buy your house for investment reason to either flip the house and resell it on the market, or rented out.

It means to you as a seller that you don’t have to pay any money to sell it for repairs or clean up. You sell it to Quality Properties Of Northwest Florida LLC AS-IS without doing anything. Now if you decide to sell it with an agent you will have 2 choices. One you sell it as is on the market but you wouldn’t get a full asking price because it needs repairs and there’s no telling how long it will set on the market. But the bad thing about this option that you still have to pay realtor commission fee and closing costs on the top of that! Where selling the house to Quality Properties Of Northwest Florida LLC you don’t pay for anything. So what’s the point on selling the house that needs repairs on the market? This is wouldn’t work on your favor as a house seller because you will pay for unnecessary fees.

On the other hand. If you have the funds and you want to do the repairs yourself, or hire a contractor or a handyman to do the repairs for you, and then sell it on the market to get retail value, then this might work for you. But remember, don’t overlook the capital gains. What’s capital gains?

For those who don’t know what’s capital gains. It’s when you sell a property for a profit. For that tax year, and when you fill out the tax returns. You will have to pay around third of the profits you made from selling the house.

If you inherited a house and want to repair and sell to get the retail asking price. Then you will pay the capital gains to uncle Sam. You will have to ask your CPA about the taxes as we’re not here to tell you how much you have to pay. We’re giving you the heads up on what to expect so you can be aware. But always consult with your CPA when it comes to capital gains or taxes in general.

5) If the market will continue to grow faster than your other options, hang on to the investment.

We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your property in another way that outpaces the performance of the real estate market, you should. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on – real estate can be a great investment if you know how to correctly read the market.

6) Uncle Sam wants a piece of the action.

Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.

7) Consider all your options.

In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our Pensacola investment experience can help you win.

8) Compare a few scenarios.

We’ll help you determine prices for any property near Pensacola – if you sold it today without doing any work, the highest price the market will bear, and the projected value of keeping it as a rental (along with the costs).

Just call us at Quality Properties Of Northwest Florida LLC today at 850-346-4995 or contact us now for more information
on how we can make you a fair cash offer on your inherited house today!

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