Inheriting a home is often viewed as a symbol of trust and honor. However, it can also introduce a complex set of responsibilities, particularly during a time of mourning. When you inherit a property, you’re faced with pivotal decisions: Should you sell an inherited home, convert it into a rental, or move into it yourself?
This decision becomes even more complicated if you share the inheritance with siblings or cousins. You’ll need to navigate family dynamics while also considering the logistical challenges of managing, renting, or selling a property—especially from a distance.
For those who have recently found themselves the beneficiary of a home, be prepared for a journey filled with both challenges and opportunities. Accepting this inheritance is a profound honor that brings substantial duties. Whether your choice is, “I inherited a house and want to sell it,” or you opt to invest the effort to maintain the home within the family, brace yourself for the hurdles that lie ahead:
1. Distance
Our society is more nomadic than previous generations. It’s common to end up in a different city from family and loved ones. As a result, you’re likely to inherit a home nowhere near where you live. This scenario creates a unique challenge because houses must be maintained, which is hard to do from a distance.
Dealing with yard work, paying the bills, ensuring the security of the property, and dealing with any repairs are all really hard to do from afar. It often means scheduling regular trips to take care of the home or hiring local help to oversee the management of home maintenance. Both are expensive and time-consuming.
2. Emotions
Often, inheriting a home comes with emotional baggage. The honor of gaining a substantial financial asset is only possible because of the loss of someone you love. It is an interesting situation to navigate, filled with complex emotions.
Making logical decisions about what to do with a home filled with memories can be challenging. Sorting through the contents of a home can evoke even more emotions. The emotional element of an inheritance is tricky and might even be the most challenging part of being an heir.
3. Expenses
People are often caught off guard by the expenses that can accompany a home inheritance. Even if the plan is to sell the property, large expenses often must be taken care of before you receive a check from the proceeds.
The estate will sometimes cover the expenses, but if it doesn’t, an heir is responsible for the upkeep of the home until it sells. Fronting repairs and maintenance costs is challenging for many heirs and not always in their budget. These expenses can come in a variety of forms:
Repairs
Getting a home ready to hit the market can be expensive. The home must meet current health and safety standards. Depending on how much upkeep the previous owner could do on the house, this can be a ton of work and very expensive.
Taxes
Inheritances come with a tax burden. The specifics vary by state and size of the estate. When you receive an inheritance, the taxes must factor into your plan to keep or sell the home.
Liens
If the property has a lien on it, the lien transfers with the home. So, when you inherit a house with debt attached, that debt becomes your responsibility.
Bills
After you inherit a home, the bills still need to be paid. The mortgage, utilities, property taxes, and upkeep expenses are all your responsibility until you no longer own the home. While you can usually expect to make up for it in profits from the home sale, you will have to front these costs in the meantime.
4. Work
Inherited homes can often come with a significant workload, especially if it’s an older home or someone lets it fall into disrepair. Whether you plan to move into the house or sell it, you will need to bring it up to current standards.
People are often surprised by how much work it can take to bring a home back to life. Coming up with the time and the funds to oversee home repairs can be difficult for anyone.
5. Sharing
It is common for an inheritance to be split between loved ones, leaving shares of assets divided between multiple parties. This means you can end up owning a share of a house, which can be straightforward or fairly complicated.
If all parties agree on the home’s future, this is easy. However, things get tricky if the group has different perspectives and opinions. If part of the group wants to sell, but another part doesn’t, it often means negotiating a buyout. While this isn’t impossible to overcome, it creates a more complex scenario.
Someone left you a generous gift when they left their home to you. While the process of inheriting a home comes with its share of challenges, it also opens up doors for you and your financial future.
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Infographic
Inheriting a home can come with unexpected expenses for repairs and maintenance. These costs can be challenging, so it’s important to be prepared. Learn more in this infographic.
