Inherited a House in Virginia – What To Do?
First, we’re so 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.
You’re thinking, “I inherited a house, what to do with this house?” Should I rent it? Should I sell it? How should I sell it?
Tons of options open for you, but we can help.
Inheriting a house in Virginia can be both a blessing and a challenge. While it’s a significant asset, deciding what to do with it—whether to rent or sell—can be daunting. This blog aims to guide you through the process of selling an inherited property in Virginia, offering insights to help you make an informed decision.
I Inherited A House. What Are My Next Steps?
Here’s 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 bear in mind that if the individual who bequeathed a property to you also had a mortgage on it (unless the property was mortgage-free and fully paid off, in which case you’re in the clear!),then you will be in charge of making the mortgage payment if you wish to retain ownership of the property. Depending on the bank, you may be able to take over the existing loan, or you may be required to refinance and obtain a new loan. In case you are unable to qualify for a new loan, you may not be able to rent the property out as an alternative option.
2) The investment 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 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. On the other hand, you may have inherited a home and are considering renting it out for additional income. While this is a sound strategy, it’s important to note that managing a rental property can be challenging. You’ll need to be prepared to handle all aspects of property management, including the various issues that can arise with tenants and the upkeep of the property itself.
3) Property ownership costs money.
It’s rare to see a 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.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Virginia houses for cash, as-is.
5) If the market will continue to grow faster than your other options, hang on to the investment.
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.
6) Uncle Sam wants a piece of the action.
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.
In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our Arlington investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Virginia – if you sold it today without doing any work, the highest price the market will bear, and the projected value of keeping it as a rental (along with the costs).
Making Your Decision
Deciding whether to sell or rent out your inherited property in Virginia depends on your financial goals, personal circumstances, and preferences. Here are some final tips to help you decide:
- Financial Goals: Consider whether you need immediate cash from selling the property or if you can benefit from rental income over time.
- Personal Involvement: Assess how much time and effort you are willing to invest in managing the property if you choose to rent it out.
- Market Conditions: Evaluate the current real estate market conditions and rental market trends in Virginia to gauge the feasibility and profitability of both options.
FAQs
Q1: What happens when you inherit a house in Virginia?
The disposition of real estate depends on its title and the existence of a will. If real estate is held as tenants by the entirety or joint tenants with rights of survivorship, ownership automatically transfers to the surviving co-owner.
Q2: What happens to a house when the owner dies in Virginia?
If there is someone other than the surviving spouse, one-third of the estate typically goes to the surviving spouse, while the remaining two-thirds is divided among all children. In the absence of a surviving spouse, the entire estate passes to the children and their descendants.
Q3: What happens to tax when you inherit a house?
When inheriting a home, its tax basis is adjusted to reflect its current market value, effectively minimizing or eliminating potential capital gains taxes. Additionally, significant expenditures such as renovations or major repairs can further adjust the tax basis, potentially reducing taxable gains upon sale.
Q4: Can heirs sell inherited property?
Each co-owner possesses the right to occupy the entire property, sell their ownership share independently, and petition the court for a partition suit to force the sale of the property if necessary.
Q5: Who can file a list of heirs in Virginia?
If a personal representative has not been appointed within 30 days after the decedent’s death, any heir at law of the deceased who died without a will may file a sworn list of heirs. This list must adhere to the specified form provided to each clerk, or a computer-generated version thereof, as per state regulations.
In conclusion, inheriting a house in Virginia presents you with choices that can impact your financial future. Whether you decide to sell or rent out the property, it’s essential to gather information, weigh your options carefully, and possibly seek advice from real estate professionals to make the best decision for your situation.
We’re seasoned investors in Virginia real estate, and we’re looking to buy several houses each month in the Virginia area. Every month we get calls from those who have inherited a house and are looking to sell the house… if you are looking to sell, we are here to buy your inherited house!