As if the death of parents is not hard enough, deciding what to do with their home often adds extra layers of complication.
In most cases there are three options to consider. You can sell the house, you can live in the house yourself or you can make the house an investment property and rent it out to others. Each has its own benefits and disadvantages but the best option for you should become clear after careful consideration.
Selling the House
This is the most common option, and under the best of circumstances offers a clean and profitable way out from under the parents’ house. Unfortunately, selling an inherited house can just as easily be difficult, stressful, drawn out and complicated by emotions and disagreements between siblings.
When selling, it is best to consult with an experienced local real estate agent as soon as possible. They will be able to advise on how the property would best be improved to sell quickly (such as which repairs to make before listing and when to leave something as it) and will give a realistic listing price based on comparable properties. There are also quick-sale companies that buy properties for less than market value but require no improvements or cleaning.
Renting the House
Making your inherited house an income property can be a smart move. You can keep your parents’ home and cover the costs associated with it and hopefully then some. The downside to renting your properties, however, is that you have to rent properties. Being a landlord can be a major hassle and potential problems are endless.
Moving In
This is a good choice for those who like the idea of living in the family home. If the property is not under mortgage it can be financially beneficial too, as long as other costs are taken into consideration, like monthly utilities and property taxes. If there are siblings who also have a stake in the house, you will likely need to buy out their shares. An attorney can advise on how this should be done.
Depending on the state of the home and your parents’ taste in decor, you could need to do some significant repairing and updating. This gets expensive, especially when added to the other costs that will inevitably come up, but the end result can be a home that is your own perfect mix of sentimental and updated.
Planning Is Key
Hopefully, your parents already consulted an estate planning attorney, had a will and everyone involved in the estate was aware of the intended plan. The importance of planning ahead cannot be overstated; it can be the difference between a bitter, stressful ordeal and a relatively painless transition.
If you have not already and the option is still available, start a conversation with your parents as soon as you can. Disagreements between siblings, heavy emotions and a lifetime of accumulated stuff to contend with are extremely common when managing parents’ estate and can be traumatic. A little preparation goes a long way toward reducing at least some of the stress involved with inheriting a house.
The New York estate planning law firm of Littman Krooks, LLP combines extensive legal knowledge and experience with individual attention suited to each clients’ needs. For over 25 years, Littman Krooks attorneys have brought astute, honest counsel and strong, thorough representation to every client they have served. Reach Littman Krooks at https://www.littmankrooks.com/.
