Today, it is hard to see clearly about the future of the economy. There are simply too many uncertainties when it comes to the future of the country, politics, and individual industries. Even the property market is very volatile, and many investors are trying to move away from putting all their eggs in one basket. If you have recently inherited a property, you might be wondering whether to hold on to it and rent it out, try to flip it, or sell it and invest in foreign funds. Below you will find a few pointers to help you make the right decision.
The first thing you will need to consider is the location of the property. If it is in a popular area, you will have a good chance of selling it on straight away without having to spend money on it. However, if it is a holiday home, you will probably have a lot of work to do, not to mention the hassle of traveling and managing the project. You will have to decide whether or not you could get a good return on investment, even if the housing market will struggle for the next few years. It is recommended that you check what types of investments are planned in the region that might help house prices increase.
It is recommended that you get at least three independent companies to complete a full valuation of the property. One is simply not enough, and you will be able to get some expert advice on how to invest in the home to grow your net worth if you talk to more than one expert. You might get an official valuation, and it is likely that you will be charged inheritance tax on top of that figure, so it is important that you are aware of the figures and numbers.
In many cases, inheritance is not as straightforward as you would think. You will need to ensure that you are given expert advice on how long the court will take to make a final decision. You should talk to a legal professional experienced in similar cases. If you want to keep an eye on your budget, you might be better off using a probate service with a fixed fee instead of just walking into the first solicitor’s office and being billed for every hour they spend preparing your case. If the probate is complicated, a fixed fee service is a better and more cost-effective solution.
Cost of Maintenance and Tax
To decide what to do with the property you just inherited, you will need to work out how much you will need to pay for the maintenance and the tax of the property. If the home is worth £300,000 and you will have to pay a fixed percentage tax, chances are that you will need to find the money first. In case you don’t want to get into debt over your inheritance, you will need to make a decision whether or not holding on to the property is worth the hassle.
Can You Use the Property?
It might be the case that you consider moving into the property you have just inherited If you are ready to relocate, or would like to keep the estate in the family, you might need to prepare for some lifestyle changes. Provided that your inheritance is not divided among you and other relatives, you can sell your current home and move into the property, which will reduce your tax obligations. You will just have to make sure that you are able to get used to the new life.
The Rental Market
If there is one uncertainty in the economy that affects most people living in the UK, it is the one related to the property market. You should find out whether the rental market is going to grow. If the houses are becoming extremely expensive, and it is a preferred location, or there is a shortage of housing, you can make a good profit by renting out the property you have inherited. It is always worth talking to a local estate agent to find out where the trends are going. You should also check the local government regulations and find out how much you have to spend to bring the property up to standard and let it out without receiving a penalty.
If the property is in a remote location, and you don’t have good neighbors to look after it, you might be better off selling it, so you don’t have to put up with sleepless nights worrying about crime or accidents. Likewise, if the property is not insured, or boarded up, you might find squatters in there next time you go for an inspection.
Alternative Investment Options
You might get a 15 percent yield on your property if you rent it out, but there might be other, more profitable options. You will have to consider how much time you have to maintain the condition of your rental property, and whether or not your time is worth the money you are getting back. If you can put the money towards improving your business, and grow your profits faster, that is something you should consider.
Flood and Other Natural Disaster Risks
You might not be familiar with the location of the property, and the geography of the area. It is important that you get an environmental survey completed, so you can assess the natural risks. If the property is close to the seaside, and it is at risk of floods or landslides, your assets will be in danger every year, due to the impact of global warming.
Inheriting a property is never good news, as it means that you lost a family member. An additional home in your real estate portfolio is not always good news, either. You will have to consider the risks, tax, and other costs before you decide to hold on to the house or flat.