Sell or Rent Out My Inherited Property

[Megan Bowen]

Hello all! 

Newbie here and I am in need of some advice and guidance. My current residence (3bds 3ba) was an inheritance from my father.  The property is paid off and probate is finally over. Originally I had wanted to use it as a LTR but am now considering selling it as that would fund more real estate investment opportunities ( according to my realtor friend it should sell for approximately $237,000). It needs some updates and minor repairs and I have $30,000 personally I am willing to put into if it makes sense financially to do so. Math and numbers are not my strong suit, so can someone help me figure out which option of the two makes more sense? 

[Bill B.]

If you had $220k in cash (approximate cash after selling costs.) would you buy this home as a rental? If so, great, keep it, if not, sell it virtually tax free and move on. 

As far as repairs/upgrades you only do those required for safety or are very cheap but make a big impact. You wouldn’t believe how many “upgrades” are ripped out by the new buyer. 

Lastly. I’m sure your friend the realtor is a nice person and it would be awkward not to use them. But make sure they’re your best choice. This may sound harsh but it could cost you $10’a of thousands of dollars. Imagine if your college drinking buddy barely passed med school (maybe with some help)  and you needed heart surgery. 

Ps. It sounds like you live there? (You said my current residence.) where do you plan to live if you make this a rental? If you’re leaving the area I’d be even more inclined to sell.) if you haven’t got a new primary home picked out you could consider a duplex as your next home and first investment. It’s kind of a dip your toes in the water investment.