Inherited Houston House? What To Do Now?
Sell, rent, or live in it. When a relative passes and you are the beneficiary of an inherited Houston home you are left with those three options. It can be overwhelming to think about, especially if you were not expecting it. The best thing to do when you inherit a Houston home is to wait and weigh your options to make an informed decision(if you can afford to wait). Making a decision while grieving could make your thinking clouded by emotion because of everything else going on.
***Note*** When you inherit a house, you also inherit the liens on the house ***Note***
Live in the inherited Houston house
By far one of the most popular options when inheriting a Houston house is to live in it. This can be a great solution for you and your family especially if you do not currently own a home or need to move into a larger house, if the inherited house is larger of course. This is very appealing heirs because they are able to keep it in the family. The many years of memories in the home are difficult to part with for most heirs.
Another reason to live in an inherited house is most of them are also completely paid off or close to being paid off so you do not have to worry about a mortgage payment. If you do decide to move in there are a few things you have to check first though:
Is the house in a livable condition?
Does it require immediate repairs?
Does the neighborhood feel safe?
Can you afford to maintain the house?
These questions need to be answered before living in the home, not after. Have a home inspector do a walkthrough of the home to find out exactly where you stand. Some serious repairs are not recognizable by someone that is. inexperienced in home inspections or repairs. Also, take into account the expenses of the inherited property? Can you afford the yearly tax bill and maintenance? The last thing you want to do is move in to realize you need to move right back out.
Rent the inherited Houston house
Renting the inherited house is also another option, this one being a more lucrative solution. Renting the house means you get to keep it in the family but also make some profit in the right market. There is also quite a few landlord tax deductions you can qualify for come tax season. Figuring out your monthly cash flow will be key to determining if this is the right decision for you. Before renting out the inherited house do some research on how much you can rent the house for. If you need help with that reach out to a local real estate agent or just contact us, we are always glad to give free information.
First, the house needs to be in livable condition. If repairs are needed they need to be addressed and paid for before renting out the property. Next figure out your monthly expenses to renting out the house. Most rental expenses can be broken down like this:
Mortgage payment (if any)
Homeowners association fees (if any)
Yearly Taxes (divide by 12 to get a monthly rate)
Property Maintenance – 25% of monthly rent
Vacancies – 10% of monthly rent
As a landlord, you need to provide property maintenance to keep the property in a livable condition for your tenants. Landlords in Texas have to follow strict rules when it comes to their rental properties if they want to avoid expensive legal trouble. That means if your tenant calls needing repairs on the house, you have to be ready to act quickly and pay for repairs or risk not complying with Texas law.
Figuring out these expenses will take some legwork and phone calls but crucial to decision making. Significant positive cash flow will mean you have not added an extra expense and burden to your responsibilities without compensation. Remember, once you sign that lease agreement with a tenant, they are locked in for that term, and you are locked in as well, and both parties have to honor it. If you do decide to rent out the house Texas Realtors provides a great, free, residential lease contract you can use. Download it by clicking the button below.
Sell the inherited Houston house
Selling your inherited Houston house is a viable option for an heir. If the other two solutions do not work out for your needs then selling might be the way to go. If you do not need the house, or have no interest in keeping it in the family, the cash you receive from the sale is a big plus for any heir. This cash received is only magnified by the fact that you receive a tax benefit called the “stepped up” cost-benefit from selling an inherited house. This means any capital gains tax you pay for the sale of the inherited house is from the market value at the time of your relative’s death, not the original purchase price.
What this means is if your relative paid $60,000 for their house in 1990 and the fair market value at the time of death in 2020 was $200,000, only the difference between the updated amount at the time of death and the sales price would me considered a taxable long term capital gain. This is a huge advantage to selling an inherited house because if you sell for the market value at the time of death, you are paying $0 in long term capital gain taxes. If this tax advantage did not exist, if you sold an inherited house with the example above, you would be paying long term capital gain taxes on $140,000(the difference between $200,000 and $60,000).
Good Neighbor buys inherited Houston houses
Good Neighbor Home Buyers in Houston, Texas makes selling your inherited house easy. We do not require any repairs to the property and pay all closing costs for the seller. Good Neighbor, the trusted Houston area house buyer has purchased many inherited homes because of our ability to let the sellers set the terms of the deal. You pick the terms and closing date when selling to Good Neighbor. Contact us at 281-713-3255 to receive a ZERO realtor commission, ZERO fees, fair cash offer for your inherited Houston house.
Contact a licensed Good Neighbor Home Buyers agent today to sell your inherited Houston house. We buy houses in any condition and you pay ZERO commissions and ZERO fees to sell your inherited house. Call us at 281-713-3255 or fill out the form below.
“Good Neighbor, the trusted Houston area house buyer”