1 day ago

You’ve inherited real estate…now what?

Inheriting real estate, whether it’s a home or farmland, often comes at an emotional time and can bring a mix of excitement and stress. No two situations are alike, so it’s important to understand the steps and options available to you.

First Steps to Take:

1. Consult with Professionals:  

  Before making any major decisions, speak with your estate lawyer, financial advisor, and a trusted real estate professional. This helps you understand the property’s legal standing, any tax implications, and its value.

2. Secure the Property: 

  Make sure the house or land is secured to prevent any issues. For homes, lock all doors, secure windows, and make it look occupied. If it’s farmland, ensure any equipment and/or buildings are protected.

3. Assess the Property’s Condition:  

  Take stock of the property’s condition. Is it livable or does it need significant repairs? For farmland, consider the productivity and condition of the soil, or if there’s any equipment or structures that need attention.

4. Transfer Utilities, Settle Bills, & Review Current Agreements:  

  Take immediate action to transfer the utilities into your name and settle any outstanding bills, such as property taxes or past-due utility payments. If the home or land you have inherited is currently under a lease agreement, review the terms and take special note of any landlord obligations you may need to fulfill.

5. Get an Appraisal or Market Valuation:  

  An appraisal or market valuation helps establish the property’s market value, which is useful for selling, leasing, or even holding onto the property. It will also help determine the tax implications for you and any co-owners.

Exploring Your Options:

Once the property is secure and the paperwork is in order, you have several options to consider:

1. Keep or Lease the Property:  

  If the inherited property holds sentimental or investment value, you may choose to keep it. For farmland, leasing it out to tenants or farmers can provide a steady income while retaining ownership. Out of touch with current farmland rental rates? Your Kraft Real Estate team can not only advise on appropriate rates, but also can facilitate a cash rent auction on your behalf, in which prospective tenants bid the rate at which the farm will be rented for the next leasing period.

2. Sell the Property:  

  If the property feels like more of a burden than a benefit (or you would like to benefit from the sales proceeds sooner than later), selling may be the best option. Kraft Real Estate Services can assist with this by offering a start-to-finish solution. We not only manage the sale of the property itself, but we can also handle a complete estate sale, cataloging personal items for auction, assisting with cleanout, and ensuring everything is handled with care. If you’re inheriting farmland, we specialize in farm auctions, delivering maximum returns through competitive bidding.

  Farmland often benefits from going straight to auction, especially if the land is productive. With Kraft Real Estate Services, you can trust that we will market your property to the right buyers and maximize its value through a well-orchestrated auction process.

Additional Considerations:

– Sibling Buyouts: If you’re sharing the inheritance with others, such as siblings, you may need to discuss buyouts or joint ownership. This can be a delicate process, but legal guidance will ensure fairness and clarity.

– Tax Implications: Inheriting property can have tax consequences. Depending on when you sell, you may owe capital gains taxes, especially if the property increases in value. Be sure to consult with a tax advisor to understand your situation fully. Your Kraft Real Estate team can connect you with an experienced 1031 exchange broker to provide solutions to avoid or mitigate capital gains taxes.

Inheriting real estate comes with challenges, but with the right approach, it can also provide significant opportunities. Whether you choose to keep, lease, or sell, Kraft Real Estate Services is here to guide you every step of the way—offering expert solutions tailored to your needs. Contact us to discuss your options today!