Houses are among the most prized possessions in society. Owning your own home is a sign that you have made it in life, which is why they do not come cheap. Furthermore, unlike cars or even cash, the value of a house appreciates over time, thus making it an incredibly wise investment for anyone to have.
If owning a house is already enough to brighten up someone’s life, then inheriting one must seem like winning the lottery. Having an inherited house passed onto you by your parents or relatives without having to work for it might be one of the greatest gifts one can receive in life. However, dealing with an inherited house comes with a great deal of work and responsibility.
Here are some of the things to think about if you end up inheriting a house:
What do you want to do with it?
There are three courses of action to respond to what should be done with the house. The first is to make some easy money and sell it. Many people are willing to buy inherited houses that others have no use for. If you do not want to be bothered with maintaining the house, or if you need some money right away, this is the best thing to do.
The second option you have is to rent it out. This allows you to use the house to earn some money, but this also comes with additional responsibilities, such as making sure the house is well-kept, as well as finding tenants to live in the house. Becoming a landlord is never easy, so it is best to think about whether or not the rental income justifies the effort.
Lastly, you can always choose to move into the house. Whether or not this is a good decision depends on your family arrangements. If you are sharing the house with your relatives or family members, you must become “we”, and make decisions as a team. Thus, you had better make sure that your entire family knows exactly how to deal with the house.
How will it affect your taxes and expenses?
Each course of action comes with a corresponding effect on the taxes that you need to pay. If you choose to sell the house right away, then you can avoid paying capital gains taxes on this sale. However, depending on the state you live in, merely being a recipient of an inherited asset means that you might have to pay estate taxes.
Furthermore, if you choose to rent the house out or to move into it, you will have to factor in the cost of maintaining the house. If you believe that the house does not fit your needs or is too much for you to handle, it might be best to sell simply.
Will it lead to any family squabbles?
If the inheritance is passed on to you as the only child or living person to accept it, then consider yourself lucky. It is highly common for properties and houses to become contested among family members, especially if one winds up receiving much less than others.
Furthermore, there might be a lot of emotions and sentiments involved, as well. You might have to split the belongings in the house with your siblings, and even the action of deciding how to do this can be difficult for some. Hence, it is best to make sure any major decision regarding the inherited house is talked over with your family first before proceeding.