I Inherited a House in Oakland California, What To Do?
Should I rent or sell if the property is in Oakland, CA?
First of all we would like to say that we are sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times and can be even tougher in more stressful situations.
If you’re thinking, “I inherited a house, what should I do with this house?” Should I rent it? Should I sell it? How should I sell it? I don’t want to deal with this? How do I solve this quickly with as little stress and time as possible?
If some of those thoughts are going through your head, there are many options open for you, but you may not be aware of them all or how they work.…
… we can help.
At www.sellmyhousefastoakland.com we are a team of seasoned investors in real estate in Oakland, CA . And we’re looking to buy several houses each month in the Bay Area. Every month we get calls from many people who have inherited a house and are looking to sell that house… the info below includes some tips to help you navigate the process.
I Inherited A House, What Should I Do Next?
Below are a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, renting may not be an option for you. It is important to keep in mind that this debt on the property be serviced or paid off because a few months of non-payment can turn into a huge mess.
2) The investment (house) is only as good as the manager.
If dealing with brokers, maintenance, tenants, rent collection and all the nuances of property management isn’t the best use of your time, hire a professional to help you take care of those things or cash out now. Some people who inherit homes decide to keep the house and rent it for extra income. That’s a great strategy for sure. You just need to be prepared to manage the property and the hassles that can go along with tenants and toilets. If you don’t have experience doing this it is highly recommended that you hire someone who does or have a family member that has this experience manage the property. This is key. We see many families skip this part, handle management themselves and end up in court trying to evict tenants they installed that weren’t screened correctly or were left without supervision, with a trashed house and months of unpaid rent.
3) Property ownership will likely require out of pocket expenses.
In our experience, it is rare to see an inherited home or building that’s been perfectly maintained. Most inherited houses need major improvements.
Consider hiring a professional property inspector to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive. And very, very likely in an older home. If the home is newer these major expenses and surprises are far less likely.
4) Selling a property through a Realtor for top dollar can cost money.
If you decide to sell through a traditional realtor as opposed to an investor. Take into account monthly expenses for paying the mortgage, taxes, repairs, utilities, and vandalism expenses and ongoing maintenance expenses that will need to be paid while you wait for a buyer to come along and their financing to go through. If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, potential vandalism, and holding costs, don’t worry. We buy Oakland houses for cash, as-is. We close in an average of 12 business days from initial contract signing.
5) If the Real Estate market prices in your area will continue to grow, and you don’t need the money now, you may be wise to hang on to the property.
We can help you analyze the value of your property today versus the long-term benefits of renting. If you can use the equity in your property in another way that outpaces the performance of the real estate market, you should. If you don’t have anything better to do with the money and the neighborhood is rising in value, hang on – real estate can be a great investment if you know how to correctly read the market, and can manage it properly.
6) Uncle Sam wants a piece of the action. Don’t forget the Tax Man.
Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.
7) Consider all your options and compare the different scenarios
You can rent, leave vacant, sell through a Realtor, sell owner finance or sell for cash to an investor amongst other options you may come up with.