Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
When a death in your family occurs, it’s easy to feel overwhelmed. You’re in the middle of grief. You often have to make hard decisions that no one ever wants to make. Therefore, people who have passed on decide to leave a final gift to those who mattered the most. People end up inheriting a home, a lump sum of cash, or a significant portion of stock shares when loved ones pass on. If you recently ended up with an inheritance, you might be tempted to buy an investment real estate item for your portfolio. It’s essential to understand the basics of what you should know. And how you should go about this.
Our guide will help teach you about this potentially lucrative way to work your inheritance, such as getting home equity or refinance the inherited property to avoid paying home inheritance tax, renting it, selling it, etc…
If you inherited a house, there are two primary ways to turn it into an investment:
Most people immediately look at a rental as the first way to make money off an inherited home. However, this is only a good idea if you are willing to invest in vetting your renters, if you’re eager to market it, and if your home is in decent condition.
Airbnb is usually the easiest way to make it happen. But the truth is that most homeowners find it better to choose long-term renters. It’s also an option to refinance an inherited home and keep the ownership.
Investments don’t have to mean long-term goods. Sometimes, you might want to have a short-term investment or cash in your home. If you’re going to make money from your inherited home by selling it off, there are several primary options that you can pursue.
Made famous by shows like House Flippers, this option is a good one if you have extra cash on hand or are willing to take out a short-term loan from a competitive mortgage lender at competitive interest rates. This would involve fixing your home’s defects and adding amenities that increase the demand for your home. This is a good choice if the following things are true:
If you want to make a cash investment that is limited on time, then you may want to call up a home buying company or list it on a real estate investor site. This is a good option if you need to get rid of the house as soon as possible or if you have a time-sensitive investment that requires large amounts of cash you do not have on hand.
Generally speaking, this is not an intelligent move simply because you will be getting less than what you would get during a traditional home sale. Unless you are very pressed for time, it’s best to use a real estate agent and a brokerage. Also, speak with your accountant to ask about the home inheritance tax.For tax purposes, talk to your accountant about paying taxes: pay capital gains taxes and property taxes.
Sometimes, the best thing you can do with an inherited home is to move in, add upgrades, and let it sit until it builds equity. The prices of homes are skyrocketing throughout the tri-state, so spending a couple of years with your home could be one of the best ways to ensure you get a profit from your home.
This is a good move because it gives you a chance to vet real estate agents, find a buyer, and review all your offers before making a sale. You can even get home equity on inherited property.
If you recently inherited a home and decided that you want to turn it into a source of income, talking to an agent is a must. A good agent will help you understand your options, weigh the pros and cons of each, and help you figure out which option is best for you.
At NestApple, we are proud to hire agents and brokers who understand their local real estate market nuances. Give us a call today!