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4 Options You Have If You Inherit a Home

When you inherit a house, you might be going through a difficult time after losing a loved one. But you might also become the unexpected owner of a home that you've probably not been involved with up until that point. What should you do with it? Here are four options you have and how you should prepare for each.

1. Refuse the Home                     

Few people would choose this option, but there could be a good reason to refuse the home you inherited.

If you discover that the home has a large existing mortgage that you simply can't cover, tax liens, or unpaid taxes on the property, those debts may be stuck with the property. If the estate has life insurance, it could cover these costs fully or partially. If not, you could become liable for these once you become the owner.

Realistically assess your ability to keep up with such payments or pay off debts that are due or past due. If financial hardship is the result of taking on the home, you may be wise to simply refuse the inheritance and let the executor handle the mess for the estate. 

2. Sell the Home

If you don't need or want the home, you could sell it once it's legally yours. Selling is also a good option if you've jointly inherited the property with other relatives.

To sell the home, first do some research into the condition of the house. If the home has been well-maintained, you may only need to make minor cosmetic changes in order to bring the house up to salable condition. You can repaint interiors and exteriors, replace worn siding, upgrade windows, replace unsightly flooring, or spruce up the bathrooms.

If the house hasn't been as well cared for, spend some time remodeling in order to maximize your profit. What are some good choices for this? Update an old kitchen or bathroom, finish a basement, add a bathroom, boost natural lighting, or make the exterior look like new. 

3. Live in the Home

Your inheritance house — especially one that's free of a mortgage — may be a dream come true. If you decide to make the house your home, you'll want to consider remodeling with a different purpose in mind. Many homes that have been lived in by one person haven't been upgraded in quite a while. You may want to start with the kitchen, dated decor, and maintenance issues that were neglected.

Beyond the updating work, you probably also want to work to make the house feel more like home to you. The feeling that you're living in someone else’s house could either hold you back or remind you of sadness. Either way, focus on improvements that appeal to you personally. 

4. Rent Out the Home

Finally, a worthy fourth option is to keep the property and use it as an income-producing rental home. Rental property is a good way to accumulate wealth and provide a steady stream of passive income. Fortunately, to create a workable rental property, you probably don't need to do as much updating as you would if you're selling it or living in it. 

Home remodels for a rental mean opting for quality rather than flashiness. Choose low-maintenance materials that will withstand wear and tear while still looking great and give the place a universal appeal rather than personalize it. Look at the rental market in the area for ideas on what sells and what's offered by landlords you'll be competing with.  

Which of these choices is right for you and your inherited property? The decision is personal and should be made with the help of a qualified attorney and your accountant. Once you know which direction you'll aim with your inheritance, contact H L Weaver General Construction & Painting to begin work on a renovation plan. We can help keep you focused on the right changes and staying within your budget.