Inheriting a property can be hugely overwhelming.
When you’ve lost a loved one, the last thing you want to think about is how to work out what to do with the home they’ve left behind.
Deciding what do to with the property can be extremely stressful and daunting and there are a number of options available to beneficiaries of a home – you can rent the property, live it in yourself or sell it.
Here, Founder and CEO of We Buy Any Home, Elliot Castle provides his tips and advice on how to make the process of inheriting a property as smooth as possible...
Sell the property
'If you already own a property, or the property is not right for you to live in, you may decide that you want to sell it.
If you are selling the property with joint inheritors you will need to agree who is going to manage the sale of the property and agree the minimum price you will all accept.
When you are ready to proceed with the sale you then have two options: put the house on the market and sell through estate agents, or sell the property with a private buying company which can guarantee a quick and easy sell.
If you prefer to put the house on the market with estate agents you will need to prepare the property for sale – applying a fresh coat of paint and repairing any damage. It is important to choose your agent carefully to make sure you trust their valuation and desire to sell the home, and you are happy for them to enter the property and conduct viewings if you can’t be there yourself.
However, if it is in your interest to sell the property very quickly due to mortgage arrears, it is located far from your home, or the property is in disrepair, you may be reluctant to invest the time and money to put it on the market. In this case, you can opt to sell the property through a private buying company such as We Buy Any Home who will provide you with an initial offer within 24 hours of contact - enabling completion on a house sale in as little as seven days. We will also pay the solicitor’s fees for property sales, so beneficiaries can be assured that the offer made to them, is the full amount they will receive.'
Keep and rent the property
'If the property is in a good area, for example in a highly-populated university student area or inner city, and in good condition, renting it out is a beneficial way to keep the property as part of your estate, pay off the mortgage and even provide yourself some extra cash.
If you are considering renting out the property you must be willing to commit to rent it out for six months or more, keep the house in good repair and make necessary updates and fixes when required and you have a full understanding of the legalities of being a landlord.
There are two options available for managing a rental property: agent management whereby a letting agent handles the legal process of moving your tenants in and managing any issues that occur, but you will need to pay them a retainer fee. The other option is landlord management, which means you are in charge of managing the property and the potential midnight calls about broken boilers!'
How does inheriting a house affect taxes
You will have to pay tax on any profit you make from the rental income and make sure the property is in full possession of energy, gas and electrical safety performance certificates.
Live in the property
'If the property is desirable, you may decide you would like to inhabit the property yourself.
If you are the sole inheritor this is slightly more straightforward, as it is your decision alone whether to inhabit the property.
However, if you share the inherited property you will have to seek legal advice to draw up an agreement to ensure that all parties are compensated for their part ownership of the property. Again, you will need the agreement of your joint inheritors so it is best to discuss this with them before any decisions are made.
In either case, there are a few questions you need to ask yourself before you going ahead like does the property have any debts? The value of the deceased person’s share is counted as part of their estate.
The personal representative or executor for the deceased person’s estate is responsible for settling all financial affairs. They must ensure that all debts and any tax due is paid before they distribute the assets of the estate.
Does the property have a mortgage? If you inherit a property which has a mortgage, you’ll be responsible for the monthly payments even if you don’t live there.
If you are unable to pay these, there is a risk the property could be repossessed.
An advisor will be able to help you work out your options or negotiate with your lender. Are there any tenants in the property? If you inherit a property that has a tenant you will have to take their legal rights into account.
Giving them proper notice is important and it’s important to seek legal advice to help you negotiate their contract if you don’t understand the agreement.'
Elliot is the Founder and CEO of We Buy Any Home – the UK’s number one home buying service visit webuyanyhome.com for more details