First and foremost, let us express our heartfelt condolences for your loss. Dealing with the passing of a loved one is never easy, and the added stress of property ownership can feel overwhelming. You may be sitting there thinking, “I inherited a house—what do I do now?” Should you rent it out? Sell it? Keep it? With so many options available, it’s easy to feel lost. But fear not! We’re here to help guide you through this tricky terrain.
At Cash For Chicago Houses, we are seasoned investors in Chicago real estate, actively looking to buy several houses each month in the area. Every month, we receive calls from individuals just like you who have inherited a property and need guidance on the best next steps. So let’s dive into some crucial considerations to help you make the right decision for your inherited house.
1. Make Sure the Mortgage is Paid
This might sound like a no-brainer, but it’s worth repeating: If the person who left you the property had a mortgage, you’ll need to address it. Unless the mortgage was paid off—kudos if that’s the case!—you’ll have to consider how to manage it. Some banks might allow you to assume the loan, while others may require you to refinance into a new loan. If you don’t qualify for a new loan, you may have to rethink the idea of renting it out.
Pro tip: Always read the fine print on the mortgage documents. This is one area where surprises are best avoided.
2. The Investment is Only as Good as the Manager
If you’re thinking about renting out the property, consider whether you’re ready to become a landlord. Managing tenants, dealing with maintenance issues, and collecting rent can quickly turn into a full-time job—one that might not be in your wheelhouse. If you’re not keen on handling the ins and outs of property management, you have a couple of choices: hire a property management company or sell the house now.
Some folks love the idea of owning rental properties and the passive income they can generate. But let’s be real: being a landlord also means dealing with tenants who can sometimes act more like guests from a horror movie than reliable renters.
3. Property Ownership Costs Money
Let’s face it—most inherited homes need a little TLC (or a lot, depending on the situation). It’s rare to find a property that’s been perfectly maintained, and hidden issues can lead to unexpected costs down the line.
To avoid costly surprises, consider hiring a professional property inspector. They can provide a detailed report on what needs fixing in the next five years, along with estimated costs. This way, you won’t find yourself shocked by a leaky roof or plumbing issues right after you’ve moved in. Remember, surprises in real estate can be very, very expensive!
4. Selling a Property for Top Dollar Costs Money
If the thought of dealing with repairs, kitchen updates, and landscaping improvements sounds more exhausting than exciting, you’re not alone. Many people prefer to sell their homes as-is, without making a single improvement. Good news! We buy houses in Chicago for cash, in whatever condition they’re in.
Selling as-is can save you a ton of hassle and money, allowing you to move on with your life without the burden of repairs. Just think of us as your real estate fairy godmothers—no wands required!
5. Consider the Market Trends
Is the real estate market in Chicago on the upswing? If so, it might be wise to hold on to the property for a bit longer. We can help you analyze the current market value of your inherited property versus the long-term benefits of renting.
If the neighborhood is growing and you believe the property will appreciate over time, keeping it as a rental could be a smart move. On the flip side, if you have better investment opportunities elsewhere, it might be time to cash out. Real estate can be a great investment, but only if you know how to read the market correctly.
6. Don’t Forget Uncle Sam
Ah, taxes—everyone’s favorite topic. Before you make any decisions, it’s crucial to discuss your inheritance with tax and legal professionals. There are significant property and income tax implications that can dramatically impact your costs of ownership. Trust us, getting hit with unexpected tax bills is like stepping on a LEGO in the middle of the night—it hurts!
7. Consider All Your Options
In some cases, we may be able to help you structure a lease-option agreement. This type of arrangement allows you to rent out the property while also having the option to sell it later—basically giving you the best of both worlds! These deals can be a bit complicated, but our experience in the Chicago real estate market means we can help you navigate these waters with ease.
8. Compare a Few Scenarios
Finally, let’s talk strategy. We’ll help you compare different scenarios for your inherited property. What if you sold it today without doing any work? What’s the highest price you could get if you put in some effort? And what would the projected value be if you kept it as a rental?
This comprehensive analysis will give you the information you need to make the best decision for your financial future.