What to Do With an Inherited Property: Keep, Sell, or Rent Out?

An Inherited property can be both a blessing and a challenge. While it’s a significant asset, deciding what to do with it can feel overwhelming. Whether you choose to keep the property, sell it, or rent it out, each option comes with its own set of pros and cons. In this blog, we’ll explore these possibilities, helping you make an informed decision, including why selling via auction might be the best route.

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Keeping the Property: A Long-Term Investment

?Why Keep It?

Keeping an inherited property offers a sense of personal connection and financial security. If the home has sentimental value or holds family history, it can feel comforting to retain ownership. Additionally, holding onto the property can be a solid long-term investment, especially if it’s located in an area poised for appreciation.

Key Considerations:

• Costs: Even if you’re not paying a mortgage, there are still taxes, maintenance and insurance fees to consider. Ask yourself if you can comfortably manage these ongoing costs.
• Upkeep: If the property is in good condition, keeping it may be easier. However, older homes often require regular maintenance or renovations, which can become costly and time-consuming.
• Emotional Attachments: While it’s nice to preserve family memories, the emotional toll of maintaining a loved one’s home can sometimes outweigh the benefits.

Ideal for: Those who want to preserve family heritage or are looking to invest in property for the long haul.

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Selling the Property: Releasing Immediate Value

Why Sell?

Selling the inherited property can provide immediate financial relief or help you fund other goals, whether that’s paying off debt, investing, or sharing proceeds with other family members. If the property isn’t in a location where you want to live or manage, selling may offer a more straightforward path forward.

Key Considerations:

• Market Conditions: The local property market will heavily influence the success of a sale. If the property is located in a high-demand area, you might secure a quick and profitable sale. On the other hand, if the market is slow, it could take longer to find the right buyer.
• Costs of Selling: Don’t forget that selling a home comes with costs. Estate agent commissions and potential repairs or upgrades to make the home market-ready can eat into your profits. However, with the right timing and marketing, you could still walk away with significant financial gain.
• Emotional Detachment: Selling a property that has been in your family for years can be tough. However, it’s often the most practical solution if you have no personal use for the home or if the upkeep and responsibilities outweigh the sentimental attachment.

Ideal for: Those who prefer an immediate financial payout and want to avoid the ongoing responsibilities of property ownership.

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Renting Out the Property: Creating Passive Income

Why Rent?

Renting out an inherited property can provide a steady stream of passive income. Depending on the location and condition of the property, rental income could cover all expenses and even yield a profit. If you’re not ready to sell or simply want to keep the asset while generating income, renting can be an excellent option.

Key Considerations:

• Landlord Responsibilities: Managing a rental property is a job in itself. You’ll need to handle tenants, deal with maintenance issues, and potentially hire a property manager if you don’t live nearby.
• Market Demand: The success of renting hinges on the local rental market. If demand is high and you can command a good rental price, this option becomes much more attractive.
• Taxes & Legalities: Becoming a landlord brings tax implications and legal responsibilities. Be sure to familiarise yourself with landlord-tenant laws in your area and consult a tax professional to understand how rental income will affect your finances.

Ideal for: Those who want ongoing cash flow and are comfortable with the responsibilities of being a landlord.

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Why Auction is the Best Route to Sell an Inherited Property:

• Speed: Selling at auction is fast. Exchange occurs upon with fall of the gavel, with completion typically following 28 days later. This streamlined process allows for a swift sale with no delays of negotiations or fall-throughs.
• Competitive Pricing: Auctions can drive up the price. Interested buyers are often willing to pay more, especially if they sense competition. This could result in a higher selling price than you’d expect in a regular sale.
• Certainty: Traditional sales can fall through due to financing issues, contingencies, or cold feet. Auctions typically require potential buyers to prequalify financially, which means once the gavel falls, the sale is final.
• Convenience: Auctioning a home removes much of the hassle associated with a regular sale. You won’t need to worry about staging, open houses, or negotiations. The auctioneer handles much of the heavy lifting for you.

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Final Thoughts: Which Option is Best for You?

When deciding what to do with an inherited property, it’s essential to weigh your personal circumstances, financial goals, and emotional ties. If you’re financially secure and want to preserve the property for future generations, keeping it may be the right choice. If you’re looking for a quick, efficient sale and want to avoid the headaches of a traditional market, selling via auction could be your best bet. Finally, if you’d prefer steady passive income, renting the property is a viable option.

No matter which route you choose, make sure to do thorough research, consult professionals (such as property agents, financial advisors, and tax experts), and take your time in making the decision that’s right for you.