Inheriting a property can be a strange and somewhat overwhelming experience. Most cases where people inherit properties are the result of a close relative passing away. It can therefore be a sad time with the added pressure of now having an extra property to deal with.
Many people who inherit properties are unsure what the best thing to do with it is. Selling is always an option but renting it out and earning a regular income from the property is always an option too. In this guide, we’ll walk you through the options available to those who have recently inherited a property and what course of action is most appropriate based on your situation.
Things that need to be considered first
Before you decide what, you will do with your inherited property, there are a few things that you will have to establish first.
You will need to find the will of the person who has died in order to establish your legal relationship with the property. If you are named as a beneficiary on the will, you will be entitled to your share of the estate once it is administered. If you are named as the executor, you are responsible for sorting out the estate. If there is no will in place, the next of kin can apply for a ‘grant of administration’ to prove they have a legal right to the estate.
The probate process can often take up to a year. This is the legal process when the executors sort out the assets and estate of the deceased. This will allow you some time to decide what you’d like to do with the property before you can legally do anything with it.
If there is an outstanding mortgage that needs to be paid, there is usually an initial grace period while probate is being sorted out. After this, you and whoever else is a beneficiary will be required to pay off the mortgage.
If you have inherited the property with other people, you will all own an equal share unless stated otherwise; this is known as being ‘joint tenants’. When everyone owns a share, but the share is not equal, this is known as being ‘tenants in common’.
Selling the property
If you and others own a share of the property, it is often easiest to sell the property and then split the proceeds.
Having said this, it can be challenging if the property is a distance away and/or needs updating and is full of belongings. You should start by clearing the property of its contents, putting things into storage if necessary and doing a deep clean.
If the décor is outdated, it is probably worth doing some cosmetic changes like updating the carpets and painting the walls to make it more appealing. This will help increase interest among buyers and will help achieve a higher asking price.
The selling process is the same as with selling a non-inherited property, however you will be liable to pay inheritance tax and capital gains tax on the proceeds.
Keeping the property
If there is a mortgage on the property, you will have to put the mortgage in your name, either with the same lender, or you could remortgage the property. If you own it outright, you could move in immediately.
If you don’t want to move into the property, you could always rent it out. This will grant you a regular monthly income from the property and could help you pay off the mortgage if there is one. This will come with its own benefits and drawbacks as you will be liable for the maintenance of the property, however having a letting agent manage the property for you can make this easier. If you own the property with other people, you can still split the monthly income between you.
If you have experience being a landlord, this route could make a lot of sense. If you don’t, it is worth researching what is involved in being a landlord before deciding.
This article was written by an online estate agent House Sales Direct. If you wish to sell your house fast and for free, then head over to the House Sales Direct website for more property related information and enquiries.