Owning a home comes with many benefits that can’t be ignored. Some of the most prominent are increased privacy and flexibility. Building equity in your property is also more favorable than paying rent.
For these reasons, approximately 91% of Americans claim they want to own a home at some point in their lifetime. In some situations, somebody might inherit a home instead of purchasing one. While this seems like a great opportunity on paper, managing an inherited home can be stressful.
This is true even when inheriting a house that is paid off. Let’s explore the key information you should know.
1. Understand Your Options
When you inherit a house that’s paid off, you have three primary options:
- Live in the house
- Sell the house
- Rent the house out to tenants
Living in the house is an amazing opportunity for most people. Not having a home mortgage payment can potentially allow you to save thousands per month.
Take time to consider this option if you struggle to save money or have a high cost of living. However, don’t neglect maintenance costs.
Foregoing maintenance expenses can quickly deteriorate the home’s quality. If you choose to sell the house, wait until market conditions are in your favor. This will help you get the most money possible from the transaction.
People in these cities live in areas with hot real estate markets, so it shouldn’t take long to find a buyer when selling a home. Using the home as a rental property is another great opportunity.
However, it takes a substantial amount of time and effort. This might not be suitable for people who would prefer a lump sum of cash instead of passive income.
2. You’ll Have Tax Obligations
Just because a house is paid off doesn’t mean you don’t have to pay property taxes. These will vary depending on certain factors, such as the home’s size and location. In some situations, this can cause issues for the inheritor.
For example, someone might inherit a 10,000-square-foot home in an area with a high population density. Even though the inheritor wouldn’t have a mortgage payment, they might not be able to afford the property taxes.
3. Consider Co-Inheritors
If you inherit a home with someone else, you likely can’t make major decisions without input from the co-inheritor(s). This can lead to complications if there’s a disagreement over what to do with the home. So, don’t plan too far ahead without speaking to everyone else involved.
4. Work with a Professional
Navigating this process doesn’t have to be complicated. Working with an attorney will ensure you meet legal obligations and avoid issues you may have otherwise encountered.
When looking for someone to work with, research their past reputation. Prioritize attorneys who have a track record of great results, professionalism, and reliability.
Inheriting a House That Is Paid Off Is Simple
At first, inheriting a house that is paid off can be daunting. The tips in this guide will help ensure you take the appropriate action. From here, you’ll make the most of this opportunity.
Looking for other useful articles about real estate that can help you in the future? Check out the rest of our blog today to see what you can learn!