Dear Phyllis,
I am my aunt’s only heir and have inherited her Glendale home. Her home is solid but looks like a Grandma’s home and while I am handy, I wouldn’t have a lot of money for fixing it up. I am excited for this opportunity but realize this is a big responsibility as well. Please fill me in on what I need to know about inheriting property. I am currently renting in Montrose and not sure if I should sell, rent or move in?
John
Dear John,
My condolences on the loss of your aunt. With housing affordability at all-time highs, you are very fortunate. I am glad that you are seriously considering all of your possibilities.
The simplest option is to sell the home in its present AS IS condition. If you are unable to invest time and money in updates this is the easiest alternative. But you should discuss with a real estate agent the value of the home AS IS and the increased value with some minimal repairs. For example, perhaps the home is worth $800,000. But if you painted the interior, refinished hardwood floors, replaced outdated hardware and lighting fixtures, spruced up the landscaping the value might then be $850,000 or even more. After you discuss the AS IS and AS REPAIRED values with a Realtor you can decide if it’s worth your time for you to make any suggested improvements.
Inheriting property could be a once in a lifetime opportunity! If you can afford to do so, another option is for you to keep the home and rent it. As you are currently renting you are aware that when there is a problem, the tenant contacts the landlord who is responsible for taking care of it. Also you need to have enough cash reserves to make the house payment, property taxes, etc. when the home is not rented or worse if the tenant stops paying rent. If you decide you no longer want to be a landlord, you could always sell the home at a later date.
The best scenario, is for you to keep the home and move in. You could make improvements over time, while continuing to build equity. If this isn’t your dream home, you can sell the home down the road and find one you love.
Be certain to discuss these options with a CPA to learn about tax implications for each.
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