Aside from the emotional factors, there are two sides to inheriting a property; it’s a great opportunity but it can also be hard work. So, if you’ve inherited a property, what can you do with it? The best option for you depends on your circumstances, but we have some options for you to consider.
Inherited property: your options
Before you make a decision on an inherited property, think about the different options open to you, including:
● Living in the property. The simplest of all your options; move in and start enjoying your new home. If you’ve already got a property, decide whether to sell it or rent it out and earn extra income.
● Rent out the property. Instead of living in it yourself, let someone else live in it by renting it out to tenants. It’s a great way to generate an income but go in with your eyes open as it comes with certain responsibilities, like finding tenants, collecting rent, dealing with repairs and keeping up with the maintenance.
● Sell the property. If the above two options don’t appeal to you, sell the property. Yes, you’ll hopefully make money but bear in mind you’ll need to pay Capital Gains Tax (CGT) on any profit you earn.
Whatever you decide to do with your new property asset, you must get professional advice. There are two important people you’ll need, a solicitor to help you handle the legal aspects of your inheritance and an accountant to manage the tax implications.
Making a decision: what to think about
Before you jump in, here are some points to consider first:
● Your personal circumstances. Questions to ask yourself: do you need a place to live? Do you want to generate an income? Do you need to raise money?
● The condition of the property. Assess the property by asking: is the property in good condition? Will it need repairs or renovations?
● The location of the property. Consider: is the property in a desirable location? Will it be easy to find tenants?
● The value of the property. The six million dollar question: how much is the property worth? Will you have to pay CGT if you sell it?
Think about your answers to these questions, and others, before you make a decision that affects you and your family.
What to do with an inherited property: extra tips
Here are a few extra tips when it comes to what to do once you’ve inherited a property:
● Get a valuation. If you don’t know what it’s worth, how can you make an informed decision about what to do with your inherited property?
● Check the title deeds. Make sure you’ve got the property’s original title deeds which detail who owns the property and the rights they have.
● Check for any outstanding debts. Are there any outstanding debts on the property, like a mortgage or a loan?
● What are the tax implications? You may have to pay inheritance tax on the property but an experienced tax adviser will be able to tell you more.
● Make a plan. Now you’ve got the information you need, you’ll be able to see the bigger picture and avoid any problems in the future.
If you’ve inherited a property, you may need to consider the implications for you and your family. So, we’re here to help you work out what’s best for you and those around you. Get in touch today.