So great-aunt
Gertrude passed away, and you've received a letter form her attorney saying
congratulations, you're inheriting
a house. While this windfall might convince you that you were Aunty
Gert's favorite, you'll probably rethink that after you've gone through the
headaches and hassles of inheriting real estate.
Maybe Gerty thought
you were a dot.com zillionaire and wouldn't mind paying the estate taxes and
the balance due on her reverse mortgage, but the reality is that most people
don't consider the negative ramifications of a gift of real property and the
burdens that they're placing on the giftee. As the heir, you are responsible
for the finances associated with the property beyond the taxes and
mortgage--the real estate taxes, homeowners insurance and association fees, and
the general upkeep--utilities and maintenance.
If you get lucky and
find out the house is in a popular area and is in good repair, you should
consider converting it to a rental property. You can manage the rental yourself
if you've got the time and are handy with minor repairs, or you can hire a
property management firm to oversee the entire operation for a percentage of
the rent.
You could always
move into the house and take over the mortgage payments, but that doesn't work
if you've already got a house you love and a mortgage of your own. Disloyal as
it may seem, selling the house is usually the practical path for a surprised
heir, especially if you also inherit a house payment and an inheritance
tax.
If you need advice
on how to manage the sale of inherited real estate, contact us and we can help you decide what's
right for you.
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