I grew up in Rhode Island but spent most of my childhood summers visiting my aunt in Central Florida. I have great memories of the times we spent there. Tragically, my aunt passed away recently. I’m heartbroken and still very much grieving her death. Last week, I received a call from a probate attorney. It turns out that my aunt left me her house in Florida. I am touched. I want to keep the house and spend summers with my kids there–but that just isn’t possible. I work full-time and am a single mom. I can’t just leave for the summer. Not to mention the homeowner’s insurance and the property tax bills—which my already tight budget just can’t cover. The house is still in the probate process. What are my options?
Heartbroken in RI
Dear Heartbroken in RI:
Please accept my condolences. It’s difficult, when you’re grieving the loss of a loved one, to manage the probate process, too. I’m glad you reached out to explore your options.
You are correct in your assumption that you need to stay current on the homeowner’s insurance, the property taxes, utilities, and maintenance while a property is in probate. And, if the property has a mortgage, that will need to be paid also.
It is not unusual to inherit a house and struggle to pay the bills on the inherited property. But you do have options:
1) You could relocate to Florida and make the inherited house your home. You could file for homestead exemption and begin a whole new chapter of your life in Florida.
2) You could find renters for the property. The rent income would easily cover expenses, unless there are massive maintenance issues that need to be addressed immediately. If the place is relatively move-in ready, we suggest hiring a property management company to screen your tenants and manage the property. These companies take a tremendous amount of stress off the property owner, and they’ll help you navigate background checks, security deposits, and incidental repairs that crop up while your tenants are in place. ABHCFL can refer you to management companies and provide a list of resources, if you are interested in using your inherited property as a rental property. Also, people often reach out to ABHCFL looking for rentals, so we may have leads on potential renters as well.
3) You could turn the house into an Airbnb, if permitted by the city the property is located in. Depending on the state of the house, your decorating tastes, etc., this could take a bit of preparation. But, after the initial investment, the property could bring in enough money to pay the property taxes and add to your personal finances. And it would still allow you to spend a week during the summer in Florida with your kids. Keep in mind, though, with this option as well as renting to traditional tenants, you will lose the homestead exemption on the property, and the taxes will go up (including sales tax responsibility). If you choose this option, we highly recommend you research the rules, regulations, and restrictions regarding vacation rentals in the area where the the property is located. We also recommend using a management company to run your Airbnb, so they can handle bookings, issues/repairs that arise during a renter’s stay, cleaning the property between rentals and bookkeeping.
4) You can sell the house on the traditional real estate market. If the property you are looking to sell was homesteaded, you can sell the property during the probate process. Before you list the house, you’ll need to get it market ready, which may require repairs, renovation, or just establishing a little more curb appeal—all of which require that you invest money before you see a payout. There are also costs associated with selling a house traditionally, including closing costs, real estate commissions, and holding costs (the cost of maintaining the property until closing). You also run the risk of financing falling through for the buyer–which means the selling cycle begins all over again. In order to sell a property during probate, you’ll need to hire an extremely knowledgeable attorney. Also, you will not see the proceeds from the sale immediately. If you sell during probate, the proceeds must remain in an estate account until the estate has been probated–which takes a minimum of 90 days.
5) You can sell the property to an investor, like ABHCFL. We come out to the property and assess the house. We look at comps in the neighborhood, then make an offer. The best thing about selling to an investor is that you can sell the house as-is. That means you don’t have to invest money in repairs or renovations. You don’t even have to clean out the house. You can simply take the items that mean the most to you and leave the rest for us to deal with. We want to buy your house. We’ll provide you an offer within 24-48 hours. And we can close whenever you choose. We pay closing costs and all associated fees, and there are no real estate commissions–so you get to keep more of the equity in the property. We can even negotiate down any liens on the property. ABHCFL can put a property under contract and close on the property during the probate process–however, any proceeds from the sale will be held in an estate account until the estate has been probated–a minimum of 90 days. Once the property has cleared probate, you can walk away with cash in hand.
Deciding what to do with inherited property can be emotionally trying. We hope that knowing you have an array of options eases your mind. We wish you all the best in your decision-making process. Please remember that we are here as a resource.
If we can help in any way, reach out to me directly at 407-603-6285.
All my best,