Should I sell or rent out the house I inherited?

Q: What are my options if someone else is living on the property?

If someone else is living in the property and will share the inheritance, check the will to see if it outlines property rights. If nothing is specified, you will need to reach an agreement with the other inheritor. If there is a tenant in the property, review the rental agreement and its terms. A legal professional can help interpret the contract if needed.

Q: What are my options if the inherited property is mortgaged?

When you inherit a property, you also inherit any debt, including mortgages. Options include: paying off the mortgage with your savings to own the property outright, selling the property and using the proceeds to settle the mortgage while keeping any remaining funds, or renting out the property to cover monthly mortgage payments.

Q: If I want to sell my inherited property, what are my options?

Once you are the legal owner and aware of any tax obligations, you can sell the property via estate agents, auction, raffle, or a cash sale. Selling for cash through a company like House Buyer Bureau can provide a fast, reliable sale. Completion can be arranged in as little as 7 days, with no estate agent, solicitor, or surveyor fees, and the process can be managed remotely.

Inheriting a property is a life-changing event in many ways, and it can be hard to know what to do next. It can feel overwhelming, especially when emotions are running high, so you shouldn’t make any rash decisions.

When you’re ready to take the next step, the main two options for an inherited property are to either sell it or rent it out. If you’re unsure about which option to take, we’ve put together a list of the pros and cons of selling and renting for you to consider.

Renting out an inherited property

If you’re considering renting out an inherited property, you can gain another income stream but, with the added stresses of becoming a landlord, it may not be the option for you. Remember to think about both sides of renting out an inherited property before you decide.

Pros

Provides the owner with a steady income from rental payments.
If there are multiple inheritors, monthly payments can be split between each party.
In a problem property market, there is no rush to sell and it still provides income.
Until you choose to sell, you avoid paying inheritance tax on the property.

Cons

There may be the need to update and renovate the property before renting it out and that can cost money.
Any profits made from renting out the property are taxable and it’s treated as income by the HMRC.
If you don’t live locally to the property or are inexperienced in managing a rental property, there would be an extra cost in paying an agent for management costs.
Any damages caused by tenants need to be paid to be repaired.

Selling an inherited property

When deciding whether to sell an inherited property , there are some obvious benefits such as receiving a lump sum but there are other benefits and drawbacks to consider as well. Before you make such an important decision, consider all your options to make the best decision based on your situation.

Pros

It provides a complete break from the property which can be beneficial if you’re emotionally invested in the property.
Once sold, the profits can be split amongst multiple inheritors.
You can use the profits in your own life as you see fit, perhaps on your own property.
By investing the money in stocks and shares or placing it in a high-interest rate account, you could make more money from the sale.

Cons

You could lose out on additional profit if the property increases in value.
Selling can be a long and challenging process, which can be emotionally draining and stressful.
If the property is worth more than £325,000, you could lose up to 40% to inheritance tax.
On top of inheritance tax, you may be liable to pay capital gains tax on the profit made on the property sale.
If you inherited the property specifically from your parents, there are additional legal considerations to keep in mind; learn more about selling a house inherited from parents.

FAQs

What are my options if someone else is living on the property?

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If someone is already living in the property and will share the inheritance, you will need to double-check the will of the deceased to see if they outline who has property rights. If there is nothing written in the will, you will need to come to an agreement with the other inheritor.

If there is a tenant in the property and you’re looking to evict to sell the rental property, you will need to look at the terms of the rental agreement and the agreed terms and conditions. If you’re unsure, ask a legal professional to look at the contract for you.

What are my options if the inherited property is mortgaged?

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When you inherit a property, you inherit any debt attached to It, including any mortgage left on the property. There are a few options when this happens including:

You pay off the rest of the mortgage with your savings to own the property outright.

You sell the property and use the sale to pay off the rest of the mortgage, keeping the remainder for yourself.

You rent out the property to cover the monthly mortgage payments.

If I want to sell my inherited property, what are my options?

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Once you’re the legal owner of the inherited property and are aware of any tax obligations you may have, you can look at selling the property. As well as the traditional method of using an estate agent, you may also choose to raffle off the property, put it up for auction, or sell the property for cash.

If you choose to sell for cash, that’s where we come in. House Buyer Bureau has helped thousands of people sell their properties on a time scale that suits them. We are honest about the way we work and the offers we make. Our team is set up to work entirely remotely, and we can offer completion in as little as 7 days. There are no solicitors, estate agents or surveyor fees to pay.

Chris

Chris has worked in property all his career, first as a successful estate agent before spotting a gap in the market for buying property directly from people looking for a simple, quick sale.

He has a passion for property and as an experienced valuer, has looked at well over 50,000 properties so far at HBB. He has extensive experience in property buying and regularly comments in the press on property matters, trends and promotes ways to simplify and speed up the selling process.

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