Inheriting a home will make you face the inevitable question: should I keep this house or sell it? Even if you’re in a home that you didn’t inherit it’s still a question worth considering. Buying a home is generally considered a good investment, but that’s not always the case, and for some people it might actually be the wrong financial move to make. If you’re not sure what to do about your house, or if you’re feeling that maybe you don’t want to be tied to a mortgage anymore, read on and ask yourself these questions to help you decide what’s best for your financial future.
1. How Much Remodeling is Required?
If you’ve inherited an older home, it’s a good bet to assume you’ll have some repairs to make whether you sell or live in the home. If you’re unsure of what the problems may be, it’s a good idea to have an inspector go through the home and look for potential problem areas or even a contractor who can give you a good idea of what the cost of your remodel is going to be. If the cost is low, maybe you’ll want to keep your home, but if the remodel looks like it’s going to run into the 10’s of thousands, you might be better off selling the home to someone who has the funding to fix it up.
2. Does the Location of the Home Make Sense for Your Life?
Perhaps you inherited a home just down the road from your current habitation, but if your grandma bequeathed her home to you, it’s more likely that it’s further away than your standard commute, maybe even on the other side of the country. Unless you plan on relocating, selling the home may be the best choice. But don’t rule out relocating, take the time to research your options. You may find a new and better job where the “new to you” home is.
3. How Are Your Finances?
Inheriting a home sounds like a pretty sweet deal, after all, you’re getting a home for free, right? Well, not exactly. With that home comes property taxes, utility bills, security fees, homeowner association dues, care and upkeep, repairs, etc. If you can barely make it paying your current lease, utilities, and repairs, adding the costs of another home can have a negative impact on your finances. You could rent the home out and turn it into an asset instead of a liability, but being a landlord can be difficult for some people. On the positive side, selling an inherited home can free up cash to help you pay off debts, clean up your credit score, and you can put the money into savings for a down payment on a home when you’re ready to buy.
5. Is Sentiment Your Deciding Factor?
Selling your parent’s home or your grandparent’s house can be a deeply sentimental experience. Every item that has to be cleaned out and kept or sold can be cause for laughter and tears. For this reason, some beneficiaries let an inherited home sit empty for a while before deciding what to do with it. It’s understandable. But those emotional challenges can cost you a lot of money even after only a few months. It’s a good idea if you know that you’re going to inherit a home, to decide before it happens what you will do with all those memories. If you’re willing to change your life for the sake of sentiment it’s best to know it from the beginning. If you’re more inclined to enjoy the memories but pass along the physical items you can arrange for a professional service to remove items from the home, clean it up, and get it on the market right away.
Have you inherited a home recently? What will you do with this windfall in your life?