Inherited a House in Los Angeles: What to Do? Rent or Sell? The death of a loved one, namely a parent, can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times.
Many people who’ve inherited homes have no idea what to do. And if they do decide to sell, how to sell it?
Inherited a House in Los Angeles: What to Do? Rent or Sell? Here are a few important considerations to help you make the right decision:
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 the mortgage (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.
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. Be prepared to manage the property and the hassles that can go along with tenants.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Many 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 expensive.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Los Angeles houses for cash, as-is.
5) If the market continues to grow faster than your other options, hang on to the investment.
Analyze the value of your property versus the long-term benefits of renting. Look to possibly use the equity in the 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 to the property. Real estate ise a good 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 of 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. This can allow you to capture the best of both worlds. While these kinds of deals can be complicated, our San Pedro investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near San Pedro – 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).