One of these days, you might end up hearing about a relative or family member passing on, and leaving their home to you (or perhaps your siblings and other relatives). As such, you have many options to choose from when deciding what to do with the inherited house:
You always have the option to move into this house if you prefer to. For whichever reason you wish to leave your current residence (perhaps due to its location, size, or aesthetics), you can move into the inherited home, but it’s best to have a plan on what to do with your current residence if you wish to sell it, rent it out, or just leave it as is until you decide what to do. You also would have to consider what to do with your current furniture and appliances, as well as any appliances and furniture inside the inherited home, if any.
Selling an inherited home may be difficult if there’s sentimental value attached to it, but it is still one of the available and more lucrative options. It’s best to sell an inherited home or property if there’s an urgent need for you (or the co-owners, if any) to have money, or if the house is in poor condition wherein renovating it may be more money and trouble than its worth. If you’re having trouble selling a property on your own, you can always tap a real estate agent or company to do it for you.
Rent It Out
As long as your inherited property is safe, clean, livable, and has the basic electrical systems and plumbing in place, you can always rent it out and earn passive income. Renting out the home to another family or person requires some effort to be put into it, namely basic renovation (to make it pleasing to renters), maintenance, and rent collection. Just make sure that you rent it out to someone who’s responsible and won’t pose any risk to destroying or damaging the home, or wouldn’t be able to pay rent.
Exchange for a Similar Property (Without Paying Taxes)
If you wish to exchange your inherited house or property for another house in some other city or neighborhood of your preference, then doing a 1031 tax deferred exchange could be your option. This exchange actually applies to most properties as long as the property you wish to buy or exchange it for is “like-kind” and that you’re not selling a property that you’re occupying. This means any residential home you’re not living in as well as office buildings, apartments, and even shopping centers if you have any.
Keep and Maintain It
It’s hard to part with a house or let other people use it, especially if it’s something that has sentimental value for you. As such, you can always opt to keep and maintain it, which can be costly when you consider the costs for maintenance as well as the taxes involved. You can also offer to have a relative or even a close friend to live in the inherited house, in exchange for maintaining it and paying for the utilities and taxes while they are living there. As such, keeping this house, whether with people residing it or not gives you the option to sell, rent it out, or even develop it later on, and can be your family’s backup house in case there’s a need to vacate your current residence (may it be due to a fire, accident, or renovation).
There’s no shortage of options for you on what to do with an inherited home. However, if there are multiple heirs to the property, or you have siblings and other co-owners to the home, it’s best to communicate and agree altogether as to what to do, and it wouldn’t hurt to have a lawyer assist and supervise the proceedings to ensure that everything is done legally and to minimize any legal issues and disputes in the future.