Parents want to "give" house/mortgage to daughter

[Benjamin Schneider]

First time poster, recent member and was wondering if the fantastic BP community could lend a hand.  My wife and I have come into a relatively unusual real estate situation.  Her parents own a home in Las Vegas, NV (actually Henderson). They bought during the boom and the house is still not worth the price they paid, their mortgage is approx $196,000.  Using Zillow and Realtor.com the homes value is between 245-303K.  The house is rented with current rent going at $1300, there is property management in place and has been there for over 7 years collecting 8%. Have not had an empty month in that entire 7 years.

Last week my wife's parents told us they would like to "give us" the rental property for the price of the remaining mortgage.  They also said they would be fine with staying on the mortgage if we could refi and add my wife to the loan.   My question is does that seem like it makes financial sense?  And what is the best strategy in these types of situations.  I know he could sell it to us for the remainder of the mortgage amount, but I would like to avoid bank/real estate fees if possible.

Thank you for any help/info it is much appreciated!