So, you’ve inherited a property and are wondering whether to keep it or sell it? Here are some ideas for dealing with it…
When you a buy a property, you usually have a pretty clear picture of what you intend to do with it. But, when you inherit one from a deceased friend or family member, the way forward is a little less clear.
On top of that, inheriting a property isn’t as easy to sell or move into as one you’ve purchased, which further complicates the issue. The first thing you need to do is get wills and probate solicitors involved to help you acquire the property. Once you’ve done that, you can then decide what you actually want to do with it.
In this post, we’re going to briefly discuss how the legal process of inheriting a property works, before sharing four ways to deal with it once it’s in your possession. Take a look…
What Happens When You Inherit a House?
Before you officially inherit your house, you have to go through a whole legal process. In summary, that process looks something like this:
Checking the will
If you’re reading this post, you probably know whether you are named as a beneficiary on the will or not. If you’re not in the will, the next of kin can apply for a ‘grant of administration’ to prove they have the legal right to deal with the deceased’s estate.
Waiting for probate to be sorted
Probate is a legal process where the executors of the will sort out the deceased’s affairs. This includes gathering and evaluating their assets, paying outstanding bills and taxes, and making sure everyone gets what was left to them in the will.
It’s often recommended that the executors sell the property and acquire money to give to the beneficiaries, especially if there’s more than one. So, you’ll need to decide what you’re going to do with the house at this stage to make it clear to the executor.
Transferring ownership
Once probate has been completed and the will has been administered by the executors, the ownership of the property will be transferred to you (or the money from the sale if you requested it) and you can register it at the Land Registry.
At this point, the house is yours and you can decide what you want to do with it, but what are your options?
What Are Some of the Ways to Deal with Your Inherited Property?
Now that you’ve fully inherited your property it’s time to decide what you want to do with it. The four most popular choices are selling it, moving into it, renting it out and gifting it to your children. Which ever you choose, it is important that the property is covered with insurance whilst it is unoccupied. First check with the existing policy provider to check term of cover when property is left empty. It may be the case that you will need to take out a short term house insurance policy during the decision-making period. Now, let’s explore these in more detail…
1. Selling an inherited property
Selling the property is the most popular choice for people who inherit one, especially if they already have a home. To sell your property, you need to clear it of its contents by either selling them, donating them to charity or keeping them if they have sentimental value.
You could hire a company to do this for you but, if the person who left you the house was close to you, you might want to take the opportunity to go through it yourself. It’s also a good idea to redecorate or even renovate, especially if the person who left the property to you was elderly, as the décor will likely need an update.
Once you’ve cleared the place out and spruced it up, you can invite estate agents to the property for a valuation. They can give you an idea of what the property is worth and any other renovations you can do to up the price.
2. Renting out an inherited property
Instead of taking all your money at once and running, you could rent it out instead and acquire a new revenue stream. This involves more headaches down the line than outright selling your property, but it could make you more money in the long run.
To save on headaches, but lose out on some of the revenue, you could hire a letting agency to manage the property, allowing you sit back and receive the income with little to no effort.
3. Moving into an inherited property
The third option when deciding what to do with your inherited property is to move into it yourself. Maybe the house is nicer than yours, maybe it’s in a better location, or maybe you’re renting right now, and this would be your first owned property.
Whatever the reason, you could move into the house immediately if you own it outright, or get a mortgage if the house hasn’t been paid off yet. You’d have to go through the usual affordability and credit checks you would for any property purchase, but at least this way some of it will already have been paid off.
4. Gifting an inherited property
If you’re in a situation where you already have a house you either own or are paying the mortgage for, and you have children or close family members who need a house either now or in the future, you can just gift it to them.
By gifting your house to your children, your inheritance tax liability will be reduced when you pass away. Also, if you live for another 7 years after gifting your property to your children, they won’t have to pay any inheritance tax on it.
Although this might not seem as appealing as making money from the property, which could also help you pay for things for your children, gifting it to them is just about the best investment you could make in their future.
Are These the Only Ways to Deal with an Inherited Property?
In this post, we’ve discussed four ways to deal with an inherited property, but they’re not the only ones out there.
You can do just about anything you want with an inherited property, from converting it into public gym to turning into a soup kitchen for homeless people. Whatever you want to do with the property is up to you, so go out there and make the most out of this opportunity.
Please be advised that this article is for general informational purposes only, and should not be used as a substitute for advice from a trained legal professional. Be sure to consult a legal professional if you’re seeking advice about an inherited property. We are not liable for risks or issues associated with using or acting upon the information on this site.