Inheriting a property can be both a blessing and a burden. While it’s wonderful to receive such a valuable asset, the responsibilities that come with it can be overwhelming. Managing an inherited property is a significant addition to your plate, especially if you’re already handling your own home. It’s no wonder many people consider selling the property outright. Cashing out may seem like a much better idea, especially if the property needs to be shared between many beneficiaries. Ultimately, 75% of parents want to leave their homes to their children and 70% of those children want to sell said home.
However, before making a hasty decision, consider the potential to turn this inheritance into a profitable venture. With careful planning and the right steps, your inherited property can become a lucrative source of income.
Sort Out All Taxes and Inheritance Fees
Before you can start thinking about turning your inherited property into a business, you need to handle all the legal and financial details. This involves sorting out taxes and inheritance fees. Additionally, if there is more than one beneficiary to the property, you will also need to buy their part out so you can manage the property as your own. Alternatively, you may decide to come together and join efforts to run the property as a lucrative business together.
Regardless of your decision, working with professional advisors is crucial here. A tax advisor can help you understand the specific tax implications of your inheritance, such as estate taxes, capital gains taxes, and any other local taxes that might apply. By getting these sorted early, you can avoid unpleasant surprises down the line and ensure you’re fully compliant with the law.
Arrange for a House Clearance
Inherited properties often come packed with years of accumulated belongings, which can be daunting to sort through. The first step to transforming the property is to declutter and remove all furniture and items. Old properties are frequently filled with unnecessary clutter that can hide real issues.
Plan a thorough house clearance where you remove everything that is not usable. This includes old and damaged furniture, worn-out rugs and carpets, outdated wallpaper, old clothes, and other items that are too damaged to be of any use. It’s also essential to arrange for professional waste management via a trusted network of waste haulers to ensure everything is disposed of responsibly.
Plan Repairs and Upgrades
Once the property is cleared out, it’s time to plan for repairs and upgrades. Fixing and upgrading the property not only makes it more appealing but can also significantly increase its value. Working with a professional team of contractors is vital to getting the job done right.
Essential upgrades for older properties often include renovating the kitchen and bathroom, updating the insulation, and ensuring the electrical and plumbing systems are up to code. These improvements can make the property more comfortable and attractive to potential tenants.
Furnish and Decorate for Tenants
After repairs and upgrades, furnishing and decorating the property comes next. The goal is to create an inviting and practical space that appeals to tenants. When choosing the decor, aim for a neutral palette that will appeal to a wide range of tastes.
Select furniture that is both sturdy and stylish. Durable furniture is essential for withstanding the wear and tear of tenant use while still looking good. Think about practical additions like plenty of storage, easy-to-clean surfaces, and modern appliances. All these touches can make your property more desirable to renters.
Prepare to Become a Landlord/Landlady
Turning your inherited property into a profitable business means stepping into the role of a landlord or landlady. This involves learning about your responsibilities and understanding the legal requirements. Working with a property management expert can be incredibly beneficial. They can help screen tenants, handle queries, and manage emergencies, saving you a lot of stress and time. Additionally, they can assist in promoting your rental property.
Deciding where to list your rental is another critical step. Platforms like Airbnb can be effective for short-term rentals, which often bring in higher income but require more frequent management. On the other hand, long-term rentals provide a steady income and require less frequent tenant turnover. Evaluate your goals and lifestyle to choose the option that best suits your needs.
Inheriting a property is just the beginning of an exciting journey. The steps you take next can transform this inherited asset into a profitable venture. Whether you’re considering short-term rentals, long-term leases, or even exploring other creative business ideas, the potential is vast. Take your time to explore all the options, seek professional advice, and plan carefully. Your inherited property holds the promise of becoming a significant source of income and a valuable investment for the future. What path will you choose to unlock its full potential? The possibilities are endless.
