Life-changing options when you’ve inherited a house
As parents, we hope to leave our children something substantial in our will. Something that will help them to become financially independent. For most of us, this is the family home. But what do you do when you have inherited a house and become an accidental investor?
You could sell it, of course – but is that really what your parents intended you to do? A large amount of cash might make a big difference to you right now, but cash has a nasty habit of not lasting as long as you thought it would. A better option when you’ve inherited a house may be to rent it out. Here are three benefits of doing so.
1. Create an extra income when you’ve inherited a house
I expect that your parents are like most others when it comes to bequeathing their possessions. They want to leave something sentimental – items of jewelry, treasured possessions, and so on – and something that will make a big difference to your life.
You didn’t make the conscious choice to buy the property you now own, but as an accidental investor you have a wonderful opportunity to create something that will make a real difference to you and your children.
Renting out the property will create a second income, which could be used to do so much, such as:
- make the payments on your own mortgage;
- pay school fees for your children;
- reduce the amount of hours you have to work;
- invest in other properties or assets.
This is the opportunity that perhaps your parents understood. Every month the rent goes into your bank account, they’re doing something special for you.
2. An asset that will change the future of grandchildren
Instead of selling the family home – a windfall you would rather not have, I expect – by keeping it, maintaining it, and renting it out, you have an asset which will affect the lives of many for decades, perhaps even centuries to come. The income can be used to fund a better lifestyle for you today, and then, when it’s time, will do the same for your children, their children, and their grandchildren.
You may be an accidental investor, but you are one with the power to change the lives of loved ones you haven’t yet met.
3. An asset that makes borrowing easier for the accidental investor
You now own a property, an asset with a real and growing value. Over the long term, property has outperformed every other investment asset, including shares – the world’s population keeps growing, people keep having children, and they all need somewhere to live. Meanwhile, there is a finite amount of land available, and growing demand with a restricted supply means prices rise.
When you own a valuable asset like an investment property, it’s easier to raise cash. The property becomes collateral, and banks are more comfortable lending to you – and probably at preferential rates, too. Plus, you’re a landlord with a steady income. For a lender, you’re the ideal customer.
Suddenly it becomes easier to fund that business idea, invest in a second or even third property, or pay for your daughter’s wedding.
If you’ve inherited a house, it’s going to be a difficult time. Fortunately, you’re not alone. Many people have faced the decisions you are now facing. By not acting hastily and selling straight away, you’ll give yourself the breathing space you need to make the right long-term decision for you and your children.
If you’ve got any questions, please feel free to contact the team on +44 1522 503 717 today.
Yours in effortless property management,
Brett Alegre-Wood MARLA MNAEA