First, we would like to extend our deepest sympathies. We know that this situation can be quite confusing, for a number of reasons. What’s more, even under the best conditions, managing a property is never easy.
So you say to yourself: “I’ve inherited a house; what should I do? Should I rent it? Or should I sell it? And how do I sell it?”
There are plenty of options, but…
… we’re here to help.
We are seasoned Montreal real estate investors and buy several properties in the Montreal, Quebec area every month. Every month, we receive calls from people who want to sell a property they’ve inherited. That’s why, below, we’ve put together a few tips and tricks that we hope will help you find your way in this new world of the real estate market.
I inherited a house; what do I do next?
Here is some important information to help you make the right decision:
1) Check whether the mortgage has been paid off
This may seem obvious, but if the person who offered you the property had a mortgage (unless he or she had
no mortgage
and everything is in order, in which case: great!), you’ll have to make the payments if you want to keep your rights to the house. Some banks will agree to transfer the loan, while others may force you to refinance the house and take out a new loan in your name. If you fail to qualify for a mortgage, renting your new property may simply be impossible.
2) Investment can’t thrive without a good manager
If talking to agents, maintaining the property, managing tenants, collecting rent and all the other little details of property management isn’t the best investment of your time, hire a professional to help you, or sell and cash in now. Some heirs choose to keep the house and rent it out to generate a little extra income. Obviously, this is an excellent strategy. However, you need to be prepared to manage the property and all that comes with it, including the problems one can imagine when dealing with tenants and toilets.
3) Home ownership is expensive
It’s rare to find a building that has been perfectly maintained. On the contrary, most inherited properties are in need of major renovation.
Consider hiring a professional home inspector. He can give you a list of what needs to be done over the next five years, and how much it will cost. Some surprises are very, very expensive.
4) Selling a property at full price is expensive
If you don’t want to deal with the renovations, modernize the kitchen, rethink the landscaping and clean the house, don’t worry. We buy Montreal homes in cash, as is.
5) If the real estate market is set to grow rapidly, protect your investment
We can help you assess the current value of your property, as well as the potential benefits of long-term leasing. If you have the opportunity to invest your capital in an area that outperforms the real estate market, you should certainly do so. If you have nothing better to do with these funds and your neighborhood is rising in value, you should protect your investment instead. The bottom line is that if you know how to read the market, real estate can pay off handsomely.
6) The government will claim a share of your profits
Don’t forget to discuss your inheritance with a tax and/or legal professional before taking any action. Significant sums of money are at stake, and taxes could have a non-negligible impact on your ownership costs.
7) Consider all possible options
In some cases, we can help owners prepare a lease with option to purchase contract, which allows them to both rent and sell a home. It’s the best of both worlds! This type of deal can be complex, but our experience in real estate investment in Carignan could enable you to do very well.
8) Compare different scenarios
We can help you assess the value of a Carignan property. In fact, we can tell you how much your property could bring you if you sold it today on the market, without any additional effort, as well as how much it could bring you if it were rented out (all expenses included).
