Updated about 10 years ago on . Most recent reply
Considering Estate Property
Hi!
I am very new to investing in real estate. I have a complicated question, at least it is to me. We have inherited a home in Philadelphia- Juanita Park. It is an attached home with two small apartments. Each apartment has 1 bedroom and 1 bath. The bottom apartment has access to the garage. The home will need about 10,000 in work to bring it up to par. We are deciding whether to sell it or keep it and rent out the apartments.
Here is the tricky part, we live overseas (South Korea) and our homebase is in North Carolina. We would need to hire a manager for the home in Philadelphia. My aunt, who lived in the home did rent the apartment above her and used a management company. We most likely will continue to use this company. We currently have a company managing our home North Carolina. It has been a great experience.
I am not sure if we will be paying any estate taxes as of yet. Since we would owe the home outright without any mortgage, I was considering taking a mortgage on the home (10,000) to pay for any repairs. Or possibly using the cash I have on hand to invest in the home. As I input these numbers in the investment calculator, it seems like a good deal to me.
If anyone could provide any guidance for my situation, I would love your input.
Sincerely,
Jennifer
Most Popular Reply
The state of PA does have inheritance tax. You should get an appraisal of the property's value as of the date of death to help establish the amount of the inheritance (bank accounts, stock holdings and other assets get totaled up when calculating value of the estate for inheritance tax purposes). Federal inheritance taxes apply to value of the estate above the exemption threshold amount (and that varies by year of death).
Is there an executor / executrix named in a will? Somebody in that role has to be sure that any debts of the estate are paid and publication to debtors has to take place before inheritance us distributed.