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 should I do?” Or “Should I rent or sell in Alberta? How should I sell it?”
There are a lot of options open for you, and we can help you find the one that best fits what you are looking for.
We are seasoned cash house buyers in Alberta real estate, and we’re looking to buy several houses each month in Alberta. Every month we get calls from those who have inherited a house and are looking to sell the house, and the information shared below are some tips to help you navigate through the process.
I Inherited A House, What To Do Next?
Here’s 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 it (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. When the sale of the property goes through, the bank will then be paid their remaining balance, and the rest will go to you as the owner.
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. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets. There are a lot of costs involved with renting out a property, and you may find that after every bill is paid off, there is barely any money left to go in your pocket.
3) Property Ownership Costs Money
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements, unless they were bought recently or were recently built.
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. Whether you decide to rent or sell in Alberta, it is good to know what needs to be done around the house.
4) Selling a Property for Top Dollar Costs Money
Inherited properties bring with them some sort of work when it comes to the repairs and updates that are needed. Not everyone is open to, or willing, to invest time and capital into an inherited property, considering they may not always be within easy driving distance of it. If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. Companies like Alberta Property Buyers provide private, cash sales, and we buy Alberta houses for cash, as-is.
5) If the Market Continues to Grow Faster Than Other Options, Hang On to the Investment
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.
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, whether you choose to rent or sell in Alberta. Working with an expert through this tough time can help ease the process for you, and make it less hectic.
7) 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 Manitoba investment experience can help you win.
8) Compare a Few Scenarios
You should know the value of your property- 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).