Selling an inherited house in Kansas City can be really tough in any situation. We get it. Here at kcmoHomeBuyer, we have had to help our family through the process with our mother’s home. There is the grieving process and at the same time, you are living through many old memories as you sift through belongings and find homes for keepsakes and hold estate sales. And then you have a whole house to maintain and sell.
Selling Inherited Rental Property
But when you inherited not only your parent’s home but also multiple rental properties, this can make the process even harder. In this situation, you not only have a house, but you also need to learn how to manage tenants and run a business, all within the confines of local rules and regulations that go along with owning rental property. And if you don’t want to keep them, you have to navigate the waters of selling the rental property without disturbing and losing the tenants and the monthly income.
Recently, we worked with Randy in the northland who was working through this situation. His parents had a lot of rentals and he and his siblings just didn’t want to take care of them any longer. They had been working on the sale of all the rental properties over the past 6 months and they just want to get their lives back. We were able to take a look at the rental properties and offer options for the family to consider. We made a cash offer closing in a couple of weeks and now, this rental property on 44th is just one less headache they have to manage.
Some things to consider when you do inherit rental property:
Find a Good Property Manager
If you are already in the rental business then great, but if this is totally new to you, find a good property management company to manage the properties. There is nothing worse than inheriting a fortune in rental property to have it dwindle away over time because tenants don’t pay rent, properties are not maintained, and the underlying expenses just come out of the estate for mortgages, taxes, insurance, and upkeep.
Find an Accountant
This is where you will want to go to learn the tax implications of everything. Not only from inheriting the property but also the rules and regulations that go along with the process. It may be that some things need to be filed sooner rather than later to save on taxes, the CPA is going to help you through that. And if you are working to decide to keep or to sell, the CPA can explain other tax issues there.
What is it Worth
Once you have the management in hand and have a handle on the taxes you will probably want to see what the property is worth. Seek out a good Realtor who knows and understands rental property who can complete a market analysis of the property. Not all Realtors know the rental property business, so do your homework to find the right one. They can ask you a few questions about the income side of things, take a look at the property and give you an expert opinion on what they could sell the house for as it is with a tenant, as it is if it were vacant and if you were to fix it up. Just be sure to understand what they think needs to be fixed up, as there is a lot of difference in time and costs to replace a roof and do some painting vs a whole house remodel.
Make the Decisions
Now, it’s time to make the big decision. Keep the rental property for the income or sell it for the cash.
Do keep in mind that if selling it is the plan, that selling it sooner rather than later can be very helpful. Not only do you have less stress by selling quickly, but with rental property, if it is not being managed correctly, the value can go down quickly over time.
If you are going to keep it, you then should consult with an attorney to determine the best way for you to own the property. It may be that you inherited the properties within a company or other legal entity, but if you did not, the attorney will advise you the best way to own the property.
Do keep in mind that not all attorneys are created equal and you should seek out an attorney who specializes in what you need. For example to plan the estate and the passing of property, reach out to an estate attorney. If the estate was not set up to pass easily and it must go through probate, talk to a probate attorney. When it comes to evicting tenants, an eviction attorney can help. And for how to own real estate, a CPA and a Tax Attorney who understands real estate may be the best way to go.
It can be emotionally draining to inherit a house, and more so when its several rental properties. Not only are you dealing with your loss, but you have to make all these decisions and run a business that you may know nothing about. Fortunately, there are steps you can take to lighten the load.
Here at kcmoHomeBuyer, we have worked with quite a few people who have inherited property. Some successfully navigated through the process and kept the properties. Others we have worked with have sold quickly. And one family left it to the attorney to deal with, and after a year an a half of trying to sell the rented properties, they had all gone vacant, many were vandalized and the estate lost a lot of money, but hey, the attorney got paid either way.
If you are in the situation that our seller Randy was in with his parent’s rental property, give us a call or submit your property here online. We can tell make you an all-cash offer for them, with or without tenants. And if you decide to keep them, we can give you referrals to property managers and eviction attorneys who might help you through your learning curve.
Selling an Inherited House
Lifted an enormous burden.
Selling the house closed a long chapter in my life and lifted an enormous burden. Every week I spent at the house either cleaning, keeping up on maintenance, or keeping up the lawn. This was in addition to taking care of my own home. Now I have more time to spend with my kids watching their sporting events and more time with my mom!