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. Sometimes people 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 have inherited a house, you should first assess its current condition. Have the house inspected by a professional so you know what needs work and so you can make any necessary repairs. Contact the utility companies to have the accounts switched to your name. Keep the heat and water turned on to avoid problems such as frozen pipes. Keep the electricity working and have the yard maintained to avoid making it obvious that the house is unoccupied and attracting thieves or vandals.
Clean out the House
Invite family members to the house to take any items they want, provided they were not 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 would only increase people’s negative feelings and would 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 there, the future resident can buy out the others, pay them rent or work out another arrangement.
If you sell the house, you will need to pay taxes on any increase in value between the time of inheritance and the time of sale. Consult a real estate agent on the need for repairs, the local housing market and how much money you could realistically expect to earn from the sale.
You might be able to make money by renting out the property, but you need to consider the potential costs. You would be responsible for taxes and insurance. You would also be personally responsible for maintenance and repairs, unless you hired a property manager. That would cut into your profits but could also make renting the house less stressful. You would need 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 have inherited a house, it has likely created a host of financial and emotional issues that you were not anticipating. Talk to your family and ask professionals for advice so you can make the right choices.