Have you suddenly inherited a property? Now you have to decided what to do. You have options! Read below to find out more.
What Happens If You Inherit a Property?
If you’re unsure what happens if you inherit a house, you have 3 options.
- Live in the property.
- Sell the property.
- Use the property as rental investment.
Before making a decision it’s important analyze the home to make an informed decision. A licensed Realtor can provide comparable market and rental analysis to give you data to examine to help decide if selling or renting is the best option.
Factors to Determine If It Would be a Good Rental
Not every property makes a good rental home. Unsuccessfully renting out a property can cost you more money than you would earn. That said, it’s crucial to check the following.
• The Property Meets Market Demands
• The Size, Type, and Condition of the Property
• Favorable Rental Rates
• Up-and-Coming Location
The Property Meets Market Demands
Most renters look for amenities like new appliances, modern upgrades, and a location near schools and job opportunities. Plus, a property in a desirable area can charge more competitive rates and experience less vacancy.
The Size, Type, and Condition of the Property
Additional factors to consider while determining whether or not a property would make a good rental are the property size, type, and condition. For example, is it a single-family home? How many bedrooms and bathrooms are included? Has the property been upgraded or remodeled recently?
Favorable Rental Rates
Researching the rental rates in the location of your property can also help determine if it would be a good decision to rent rather than sell. Most property owners set a goal to set rental rates that are worth at least 1% of the investment. For instance, if the property is worth $170,000, you could charge around $1,700 each month for rent.
Clearly, location plays a huge role in the success of rental properties. As such, an up-and-coming property location is best. When you have real estate in up-and-coming locations, property owners can make strategic improvements and profit quickly.
Advantages and Disadvantages of Renting
Like any investment, there are some advantages and disadvantages to renting a property.
• Property owners can earn a steady monthly rental income.
• You can set rental rates according to current market.
• Owners can hire a property manager to handle the hard work and day to day tasks for them.
• Maintaining a rental takes a lot of time, work, and patience.
• Your property may need renovations or work before turning it into a rental.
• Rentals can experience vacancies, which means you’re not bringing in any income.
Advantages and Disadvantages of Selling
Although selling it is a quick and easy there are still pros and cons to this option as well.
• You can make a large sum of money right away.
• There’s no need to fix up the property or handle tenant concerns.
• You have the opportunity to invest the money into something else.
• Completing a property sale can take a long time.
• Renting a property can be a more profitable long term investment.
• Selling an inherited home can be difficult, especially if you have attachments to the home.
Get Help Managing Your Rental Home
Whether you decide to sell or rent, both options pose pros and cons. However, we can help with all the cons of renting! At All County Property Management Group, we help property investors looking for an experienced property management company to take over the hard work and day to day tasks of property management. Our team handles everything from maintenance, leasing documents, marketing and much more! For more information check us out today.