Knowing what to do when inheriting a property can be pretty daunting, especially if you haven’t any property experience.
An elder loved one passes away, handing down a property worth hundred of thousands of pounds. The Will has been processed, probate complete and taxes sorted. Now what?
Keep calm. It’s not easy to cope with an extremely valuable asset suddenly coming your way. The first step is to not panic, think clearly on your next steps and take your time.
Here’s what NOT to do
Don’t look to sell the property and cash in straight away. Sure you’ll get a large lump sum of cash to spend on whatever you choose, maybe a flash car or an expensive holiday. But think longer term.
A car won’t give you an income but will eat up your cash quicker through insurance, maintenance and fuel.
You need to factor in timing of the market as well. Prices may have recently dropped and selling wouldn’t make the most of your asset. The UK market in some regions is in a decline due to Brexit, economic developments will therefore hit your sale income.
Look into local investment
If the area your property is situated in is undergoing major development, this may result in an upcoming property price hike.
Key areas on the path of Cross Rail have seen major price increases over the last 4 years. Properties in the UB4 postcode grew by around £80,000 during this period.
Just imagine selling before these price hikes and missing out on the extra value!
If you feel your area i going through heavy investment and prices will increase, it’s best to hold tight to your property until prices have undergone the sharp increase.
You can talk to local estate agents & property managers to get an idea of how the local market is looking.
The volume of houses for sale in that area may also indicate something is about to change. Potentially if people are holding off on selling, its usually if the area is a great place to live (so you may want to move in yourself!) or that people are biding their time for a better sale in the future.
Rent out the property
Renting out the property will provide you a steady income while maintaining full ownership.
Its not guaranteed, but property values increase over time (based on the last 30 years). Therefore while getting your rental income, the value of your house is increasing.
Lack of landlord experience?
Running a rental property isn’t smooth sailing. Fixing broken boilers, finding tenants, dealing with resident conflicts can take their toll.
An ever increasing option of what to do when inheriting a property is to get a property manager. A property manager can take on a range of services spanning from guaranteeing you rent, finding tenants, collecting payments or running maintenance.
Rent Round offers a comprehensive search facility. Enter your postcode and property details and you can easily compare property manager fees & performance (free of charge)
Remortgage the property
Depending on the details of the property handed over, you could be receiving a property with near enough the full properties value in equity.
If your not fully keen on selling, but could do with the additional income, remortgaging could be an option.
Remortgage will keep your ownership of the property and provide you with a lump some of cash from the mortgage provider.
Of course the mortgage will have to be repaid, but that can be easily recouped based on the rental income.
If you want to keep repayments low, then opting for an interest only mortgage will mean you defer payment of the actual debt until the mortgage term (which you could sell the house to cover).
Again if you’re unsure about how to rent a property & have no experience, Rent Round can help you get the perfect property manager to assist you and potential tenants.