I Just Inherited Property… Now What?

by | Jul 27, 2021 | Sell As-Is | 0 comments

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Picture this: you have just decided to move to a new home of your dreams, but life just threw you a curveball and now you have to rethink that amazing house you just purchased. Maybe you received a new job opportunity or a new baby has joined your family. Maybe you have inherited a rental property unexpectedly from a family member. In either case, you will find yourself on high tides and need some professional assistance to help you out of these accidental circumstances. 

The housing market has been volatile lately and as a result, some properties have stayed on the market for much longer than their owners would have liked due to location or condition of the home. Rather than staying put and hoping for a sale, many homeowners decided to turn their newly inherited property into a rental property, using the rent to pay the monthly mortgage payments and freeing them up to make their next move. These landlords who find themselves in the market not necessarily through choice but rather through necessity, are known as accidental landlords.

If you have become an accidental landlord who does not have any experience, let’s take a look at some useful tips to guide you in coping with the challenges.

 

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Do Your Research

As an accidental landlord, you might rush into letting your property rent to anyone at a lower price. You might want someone in there quickly, rather than no one in there. Most likely you will overlook the actual market price of your area. It is advised to research the market and gain a competitive price range to save yourself from further financial deprivation. 

However, you need your eyes wide open because as a landlord, you are moving into completely unknown territory. Remember, you must be aware of your renter background – work history, credit history, and personal references. Also, it is recommended to get your home inspected from a professional leasing agency before renting. Your leasing agent will help you make the best market price for your home and negotiate the dealing in the best professional way. 

 

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Check Legal Requirements

Renting a property requires a lot of legal documentation that you must comply with. The American Apartment Owner’s Association (AAOA) site has established useful information about legal obligations for both a renter and landlord. It states all the necessary steps you must adopt before leasing your property on rent.

Gas safety checks are imperative and are the obligation of a landlord to have checked its workability and functionality. Electrical and other facilities must be checked by a professional inspector so that you can be rest assured that your property and the new tenant are safe. Your agent would help arrange all the checks and their documentations.

Also, it is mandatory to have a valid Energy Performance Certificate (EPC) of your property, without one you cannot lease your property for rent. New legislation demonstrates the minimum criteria is “Grade E”, otherwise you have to make repairs and improve the rating for sale.

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Take Notice of Insurance Policy

Having insurance for your property is very important if you are planning to lease it for rent for more than 6 months. The Insurance Information Institute (III) provides two kinds of insurance policies – standard home insurance and landlord insurance. These policies will cover:

  • All the physical damage to your property by fire, wind, lightning, snow, and other problems.
  • Damage to your appliances that you let the renter use. All these items must be listed before renting them out.

Standard home insurance is not a legal requirement for leasing your home for rent. You will need the latter policy which will not only cover the physical damages but also has the liability to cover the medical expenses if the tenant is hurt while on property. Also, ask your tenant to have their insurance for their belongings as a prerequisite for renting. 

 

Repair and Maintenance Costs

As an accidental landlord, you never thought of allocating finances for the repairing and maintenance of your property. You might be wondering if you could even sell your rental property as is. But if you are planning to lease your property, then it is a good idea to include general repairs and maintenance in your overall operating budget. These costs must be included in the rental price for a tenant. Moreover, a proper home inspection certificate by a home inspector is beneficial in drafting a rental agreement.

If repairing an inherited home feels too overwhelming, you can sell it as is to an investor. This way, you’ll not only save the headache of finding a repair person, you will also be able to sell fast without having to do any repairs.

No Repairs = More Money in Your Pocket. Find Out How!

Tenancy Deposits

Ask your renter to submit a designated amount as a surety bond or a security deposit which will be returned depending upon the condition of your property after the end of the lease agreement. A security deposit is a legal way to ensure any harm the tenant would cause during their stay in your property. You can use this amount for repairs if you find any damage to your property. Otherwise, return the security deposit in full. You can also ask for extra deposits if the tenant has pets.

All deposits you take from tenants must be kept in a government-backed tenancy deposit scheme. There are three official accounts you can use – My Deposits, Tenancy Deposit Scheme, and Deposit Protection Service.

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Get Your Property Ready to Lease

Unfortunately, you have become an accidental landlord and likely there are chances that you might panic about bearing the challenges of renting your inherited property. A homeowner living in the same house for years might develop some sort of attachment that would never let you crop it from your memory. So it is suggested to think like a business owner instead of a property owner to get yourself ready for the myriad of challenges.

You must decide whether or not you wish to let your property be furnished. Think carefully and remove everything you think has value or is sentimental. Make your home clean and repair anything you think needs it to attract potential tenants.

Choose the Right Leasing Agent

If you are a first-time seller of your property and want to go through the process steadily then it is recommended to hire a competitive property agent. An agent will manage your property and guide you through everything you need to know. Moreover, a good leasing agent will help you find a suitable tenant for your property and negotiate the price as well as arrange the required documents which you might ignore while selling by yourself.

We can help you get rid of any landlord problem you may be facing. If you are looking at selling your property as is, but still want the passive, on-going payments, we can help make that a reality for you. If you would like to sell your property outright, we are always looking to buy. We can close quickly and pay all closing costs! Call or text us at (704)-327-2120.

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