There are several scenarios that make inheriting a house with multiple owners an experience that may come with a lot of challenges.
First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times.
You’re thinking, “I inherited a house, what to do with this house?” Should I rent it? Should I sell it? How should I sell it?
Tons of options open for you, but…
… we can help.
We’re seasoned investors in Atlanta real estate, and we’re looking to buy several houses each month in the Atlanta Georgia area. Every month we get calls from those who have inherited a house and are looking to sell the house… so the info below are some tips to help you navigate the process.
Inheriting property with multiple owners can be really a challenge especially if it is sibling. Inheriting a house with a sibling can be a delicate situation to navigate. While it’s important to ensure fairness in the distribution of assets, it’s equally important to maintain a positive and healthy relationship with your sibling. It’s important to communicate openly and honestly about your desires and concerns, and to work together to find a solution that works for both of you. Seeking the guidance of a mediator or legal professional may also be helpful in resolving any conflicts that may arise.
I Inherited A House, What To Do Next?
Here’s a few important considerations to help you make the right decision:
1) Know what type of ownership you inherited
The first step in navigating inheriting property with multiple owners is to determine the type of ownership. There are two main types of ownership: joint tenancy and tenancy in common.
What is the difference between joint tenancy and tenancy in common?
Joint tenancy means that all owners have an equal share in the property and if one owner passes away, their share automatically goes to the remaining owners. Tenancy in common means that each owner has a specific percentage of ownership and can sell or transfer their share without the consent of the other owners. It’s important to understand the type of ownership to determine how the property will be divided and managed.
2) 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 it (assuming you want to keep the property). Some banks will allow you to assume the loan when you inherited a house, 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.
3) 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. But when you are dealing with multiple owners, they might not be in agreement. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets.
4) Property ownership costs money
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements. It is wise to have a professional assess damages so you know what you are dealing with.
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, very expensive.
There is also taxes that need to be paid on the house. You will need to find out if the taxes on the home are up to date. You will not know the operating cost of owning the home until the cost of annual taxes are known.
5) Rehabbing a house can be costly.
Just because you inherited a home does not necessarily that it has a ton of value. It will all depend on the condition of the house. Sometimes it might not be worth it all; especially if you do not have the funds to bring it up to par for sale.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. You may be able to sell sell it to a We buy Atlanta houses for cash company like us, as-is. It does not matter how long the house has been empty or what furnitures was left in the home; We can help.
6) If the market will continue to grow faster than your other options, hang on to the investment
We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your 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 – real estate can be a great investment if you know how to correctly read the market.
7) Uncle Sam wants a piece of the action
Don’t forget to discuss your inheritance with legal professionals and your partners before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.
8) Consider all 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 – capturing the best of both worlds. These kinds of deals can be complicated, but our Atlanta investment experience can help you win.
9) Compare a few scenarios
We’ll help you determine prices for any property near Atlanta – 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).
10) Inheriting property with multiple owners
We’ll help you determine prices for any property near Atlanta – 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). Inheriting property with multiple owners can be a complex and challenging process. Whether it’s a family home, a vacation property, or an investment property, there are several steps you need to take to ensure a smooth transition. We hope this guide provided you with a step-by-step approach to navigating the process of inheriting property with multiple owners.