What to Do When You Inherit a Property

By Sue Richey

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What should you do when you inherit a property in Northern Virginia? Every situation is unique, and the process can be emotional, especially if the property comes from a loved one. That’s why it’s important to understand the steps involved before making any decisions.

Here are four essential things you need to consider when deciding what to do with an inherited property.

1. Assess the current condition of the property. In many cases, the home may be outdated, especially if it belonged to an elderly person. You might find features such as a kitchen from the 1980s, signs of a leaking roof, or other deferred maintenance issues. On the other hand, you may have inherited a well-maintained home that requires little work.

Understanding the property’s current state will help you determine what your options are. It also affects what you’re realistically able to do, whether that involves making necessary repairs, preparing it for rent, or putting it on the market for sale.

2. Understand the debts and costs tied to the property Inheriting a home doesn’t automatically mean that it’s free of debt. There could be an outstanding mortgage, liens, unpaid property taxes, or other financial responsibilities.

You must also consider the legal aspects of the inheritance, particularly if the home hasn’t gone through probate or if there’s no will in place. Consulting with an attorney will ensure you’re not taking on any unexpected legal issues and that the estate process is handled correctly.

3. Learn the financial implications for your situation. This includes understanding potential property taxes, capital gains taxes, and inheritance taxes, depending on your circumstances.

You should also estimate the cost of any repairs or updates needed to get the property ready for sale or rent. Even if there’s no mortgage, there may still be ongoing expenses such as HOA or condo fees, insurance, and utilities. See whether you can afford these costs out of pocket or if any inherited funds could help cover them.

4. Explore the income potential. If the mortgage is low and market demand is strong, renting it out might provide a steady cash flow and long-term financial benefits. There are definite advantages to renting, such as ongoing income and potential appreciation in value. If you work with a property manager, they can handle the day-to-day operations for you. Still, it requires attention, decision-making, and a willingness to stay involved at some level. Becoming a landlord isn’t the right path for everyone, and it’s important to consider whether this responsibility aligns with your lifestyle and goals.

On the other hand, if managing a rental property feels like more effort than you’re willing to take on, selling the home may be the more practical decision. If the market is strong, it might let you get a significant amount that you could invest in a different but better property. Getting a professional appraisal can also help you understand the value of the home and assist you in making a financially sound decision.

5. Consider moving into the home yourself. This won’t work for everyone, especially if the home is located far from your current job, family, or responsibilities. However, if the location makes sense for your lifestyle, living in the home—at least temporarily—could be a valuable option.

You might choose to move in while making improvements, or use it as a stepping stone before renting or selling later. This can also give you time to become more familiar with the property and the neighborhood before making a long-term decision.

If you’re in Northern Virginia, my team and I are happy to help you think through your options. We’ve worked with many clients who inherited homes and needed guidance to decide what to do. If you need more help, feel free to call me at 703-471-4800 or send an email to info@richeypm.com. I’m just a phone call away.