Should you sell or rent an inherited property? Read the full article:
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Should you sell or rent an inherited house?
Whether you are considering to rent or sell inherited house will depend on your personal circumstances including:
- Does your inherited property require updating to meet the current legislation?
- Do you have access to cash, time to manage the refurbishment and a trusted builder to renovate the property?
- Do you have time to legally fulfil your duties as a landlord?
- Do you have the expertise to vet the tenants, obtain references and ensure that they pay you rent on time?
- Who will be responsible for maintenance of property during tenancy?
- Perhaps you are thinking how can I sell my own house and live in inherited one?
- Or would you rather release the equity tied up in your inheritance?
Inheriting a property is an emotional time, and if you ever lived in the house, it could make it difficult to know what to do.
You may have inherited a property with regulated tenancy and wish to sell it. This is something we can help with because we like to buy properties with long-term tenants. Their rent may be lower than market rent. However, they tend to look after their home.
Is your inherited house currently mortgaged?
Please check if there is a life insurance policy that can pay off the balance. If this is not the case, you will need to contact the bank to ask for a grace period to settle your probate affairs.
Our guide goes through more details in what to do if you have inherited a house with a mortgage. Ignoring this could result in repossession proceedings and potentially losing your inherited property or ending up with a large unexpected bill from mortgage lenders’ solicitors.
Can I rent out a property I inherited?
The first issue is that this may not be just your decision, but a shared one if the house has been left to more than just one beneficiary. In this case, you will need to agree on what to do next, and this should be a written contract, ideally using a solicitor.
If you want to move in, for example, then you will usually either:
- rent the property provided that it is safe and legal to do so;
- or purchase the remainder share of the property from your siblings.
It’s wise to have the property valued by an impartial RICS-qualified surveyor so there aren’t any disagreements on what you need to pay, and any negotiations can be carried out fairly.
If the property requires substantial work to bring it to minimum lettable standards, then selling it might be a good idea to save you dealing with builders for several months and having to fund all the upfront costs.
Inherited a house, sell or rent?
In case you solely own the property, the decision is up to you. Should you decide to put it up for sale or, indeed move in yourself and secure a mortgage to release some equity, the property will need to be registered in your name using the Land Registry.
If you are thinking of selling an inherited property, often people opt for a local estate agent for a valuation. What you do not know is that an estate agent’s valuation is their opinion and not a real valuation. A real valuation can only be provided by a RICS-qualified surveyor, as trusted by banks – see our article on Probate Valuations.
This is because estate agents can get excited and over-value your property to win your instruction. Probate properties come with a myriad of complications ranging from Executors being unable to answer queries relating to the property to banks withdrawing their offer of the mortgage due to the condition of the property.
We’ve seen estate agents market a property, knowing fully well that it’s not mortgageable and needs updating. Or they might tell a buyer that you can proceed, to mark your property as ‘sold’, without disclosing that you have just applied for a Grant of Probate – this can take anything between six to twelve months to come through.
All of this leads to frustration, abortive legal costs, waste of everyone’s time and disappointment.
Property Saviour will make the experience of selling a probate property as hassle-free as possible. We understand the difficulties associated with having to deal with selling an inherited property. Perhaps you live in a different part of the country, and the distance from the probate property can be a real headache in addition to handling bills, insurance, clearance, and property maintenance issues.
We will provide support for you in what can be an incredibly difficult time. We will help with everything, from dealing with a Grant of Probate to helping you sell your inherited house at the best possible price.
We are sympathetic, friendly, and honest. We will pay £1,500 toward your legal fees. We will never push you into selling and will be ready when you are.
We will offer you a full package that means you won’t have to worry or stress about selling your probate property. We will give you a fair price for your inherited house, free empty house insurance, free probate house clearance service, along free support and advice.
We will always strive to ensure that you get the maximum benefit from your inheritance. We will also help to resolve any disputes amongst beneficiaries if required. Our ability to exchange contracts in days puts us firmly at the forefront of genuine cash buyers. We are the leading probate house buyer in the UK, and you can see that from our reviews.
Do you pay taxes when you sell an inherited house?
You do not have to pay tax if your property is worth less than the inheritance tax allowance of £325,000 or up to £500,000 if a property is left to children.
If you keep the property, you will have income tax to pay on rental income, which can be as much as 40% if you are a high-rate taxpayer. You may have to pay inheritance tax and potentially capital gains tax if you hold on to the property and sell it a few years later.
Whilst letting can offer a regular income, however, the cash you’re making will be taxed as income, and the gains on the property are subject to Capital Gains Tax (CGT). This extra income will affect any benefits you currently receive, so before you decide to keep the property and make money from that, check the tax implications with the Department of Work and Pensions.
In addition, tax rules that came into force in April 2017 mean that all landlords will be taxed on their rent rather than profits. This means that you could pay as much as 40% tax on all rents received. Perhaps selling your inherited property might be a good idea.
Should I sell or keep an inherited property?
Landlords are often portrayed in the media as being filthy rich. With constant landlord bashing in the media, there are over 200 different types of government legislation to comply with. Even the most competent letting agents struggle, and ultimately, the buck stops with you as a landlord.
Will the house need any renovation, for example, making it legal to let? Redecoration is something, but there can be a lot of hidden costs, particularly if you are not familiar with the landlord law.
You should not just move in or let it without checking it’s safe for you to do so or let it legally to a tenant, even if it’s a friend or a family member. A RICS surveyor can save you a lot of time and energy in determining what must be done. If you move in yourself, then do get an extra survey on the gas and electrics; if letting, this is essential as you will need safety certificates to let it legally.
If you decide to let it, the property will need regular maintenance, and should anything go wrong, you will need to have enough money to pay for the expense. Over time, this may cost tens of thousands of pounds for items like a new boiler, roof or windows.
Whatever you decide, take professional advice from an independent financial advisor and a RICS property surveyor. It may be wise to consider whether rental income after tax will be worth your while or whether selling the inherited property for a substantial cash lump sum will allow you to invest in more tax-efficient investments.
Can I sell my inherited property online?
The short answer is that yes, you can provide you are the Executor and you have obtained a Grant of Probate.
Grant of Probate is relatively easy to obtain. You will need a Grant of Probate to be able to sell the property legally as its rightful guardian. We receive enquiries from beneficiaries asking if they can sell their inherited property as we deal with some of the more complex probate property purchases, particularly when the Executor is a professional such as an Accountant or a Lawyer.
In the vast majority of cases, up to 95%, professional Executors act with honesty, and integrity and put their beneficiaries’ interests first.
We recommend that you confirm the fee of a professional Executor if you have one. It can be as much as 25% of the entire value of inherited estate or on an hourly basis. You could be seriously out of pocket if you drag out the sale. You are within your right as a beneficiary to ask your Executor what their fee will be for disposing of the estate, and even challenge them on their fee if you feel it is prohibitively expensive.
As a beneficiary, you need a quick sale of your inherited house with the certainty that the deceased’s estate will be wound up efficiently. If the property is left to children and the estate is valued at under £500,000 then there is no inheritance tax bill to be paid.
The secondary benefit of selling your inherited property for cash is that your probate fees will be substantially reduced. It is a fact that the longer a sale takes, these hidden costs start to mount up. These costs include:
- professional fees of an Executor acting for the estate
- unpaid interest and charges if inherited property has a mortgage
- council tax bill which can be inflated to up to 200% of rateable value
- standing day-charges for gas, water, electricity, landline and broadband
- empty property insurance
- paying for securing the empty property and its basic maintenance
Naturally, it is in the interest of all beneficiaries that the sale can be concluded quickly and at a fair price, as delay can reduce your share of inheritance money.
The property may not be fully insured once it has been unoccupied for more than 28 days. Insuring an empty property can cost thousands of pounds per year because it can attract the attention of squatters, criminals who want to steal copper pipes, amongst other things and unruly children “playing at your property” and vandalising it. You may wish to follow our guide on maintaining your empty property.
Do not worry about the condition of your inherited property. We are non-judgemental property professionals looking to breathe a new lease of life into properties. We will buy your property in its current condition.
Our service is 100% free. Our cash offer is what you will receive with zero deductions and no hidden fees. Be careful, as there are “We Buy Any House Companies” that will make you an unbelievable offer only to delay, frustrate you months down the line and then pay you a lot less once they have found faults with your property. We have an open and honest approach, which can be seen in our client reviews.
Give us a call on 0113 320 6700 or make an enquiry now to see how we can help you. We are very quick to return your call, and an offer can be made usually within 24 hours.
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
