While many consider property inheritance a blessing, it can quickly become a burden if the house you inherited is in bad shape or a bad neighborhood. In this blog, we will explore some of the disadvantages of inheriting property in an undesirable area.
Understanding Bad Locations
Some houses are located in prime locations. They’re in a safe, appealing neighborhood, near-down downtown areas, or located within a top school district.
Houses in such locations are always flying off the market, with homebuyers presenting their offers within days of the listing going live.
Other properties, however, aren’t appealing to house hunters due to the neighborhood they’re located in. Whether it’s a high-crime area or the homes are older and not as attractive, many factors can make people perceive a specific area as a good or a bad place to live.
When you inherit a property, you need to take into account these three things:
- Inheritance comes with financial and legal responsibilities, which vary depending on the property’s condition, maintenance costs, the number of benefactors, and existing debts, including the mortgage. If the mortgage is paid off, you could quickly turn the house into a substantial revenue source.
- Heirs have to take care of all tax implications, such as federal estate taxes, inheritance taxes, or capital gains.
- If there are many heirs, all must agree with what to do with the house.
Selling the house, renting it out, and moving into it, are the three most common options people consider when inheriting property. However, owning a home in a lousy location comes with many challenges. Here are some of them:
Renting isn’t Profitable.
Renting out your inherited house could become an extra source of income for you and your family and a great way to pay off debt, invest or build savings. Unfortunately, for owners whose houses are in high-risk areas, renting isn’t always a good idea. Here’s why:
No Return On Investment
Landlords whose rentals are in bad neighborhoods tend to struggle with tenant retention. Tenant turnover comes with many expenses, including:
- Vacancy: Even with the property unoccupied, you still need to pay maintenance costs, utility bills, taxes, and mortgage payments (if applicable). Hence, if you aren’t collecting rent, you’re losing money.
- Cleaning and moving expenses: Each you lose a tenant, you’ll have to prepare the property for the next lease. While you might be able to use the last tenant’s security deposit to cover cleaning costs, some cleaning, like regular wear and tear or replacing an old, will be your financial responsibility.
- Expenses of screening tenants: Although renting your home without conducting tenant screening can sound tempting, doing so might cause costly, time-consuming problems down the road.
Being a landlord comes with many risks, including late payments and non-payments, property damage, and tenant eviction. To minimize these risks and protect your home, you’ll need to screen potential tenants and choose only the best ones that you feel will take care of your property.
Depending on its location, your home could also be subject to weather damage, burglaries, and vandalism, which can translate into higher insurance premiums and regular maintenance and repair expenses.
Listing is a Challenge
With the location being a vital element in the real estate market, selling a house in a bad neighborhood in San Antonio, TX, can be a long, frustrating process. You can increase the chance of selling it by making repairs and home improvements, staging it, and providing good directions.
Know Your Options
If you want to sell a house in a lousy location but don’t want to spend time, money, and energy on staging or remodeling, selling to a trusted home buying company is a good option.
Homebuyers purchase properties for cash, regardless of their location or condition, and can close the sale within days.
Benefits of Selling to Homebuyers
You Get All the Money
When working with a reputable home buying company, you won’t have to worry about closing fees, commissions, or home inspections.
- Typically, real estate commission is approximately 5%–6% of the home’s sale price.
- Closing costs are an assortment of fees—aside from agent commissions—that both buyers and sellers have to pay at the close of a real estate transaction. These costs usually range between 1%- 10% of the sale price.
- A general, pre-listing inspection cost can be anywhere between $400 and $1000 depending on the area.
Time is money. Home buying companies aren’t real estate agents trying to list your home; they’re the ones buying it. Since they don’t rely on loans or mortgages, all-cash buyers typically have the cash ready to make you an offer.
While selling your home the traditional way, you’ll still have to pay for insurance, taxes, utility bills, and mortgage, in addition to the incurred expense of a listing. Home buying companies guarantee fast sales.
You Can Sell Your Home As-is
Home buying companies will buy your house as-is. This means you won’t have to spend time and money decluttering, cleaning, repairing, or decorating your property.
Although a cash home buyer won’t give you the highest price for your home up front, you’ll get the chance to save thousands of dollars in agent commissions, closing fees, and repairs & improvements.
Sell Your Home to Fast House Buyers
Are you thinking of selling a house in a bad neighborhood in San Antonio, TX? Fast House Buyers are here to help you. Give us a call at (713) 497-1461 or fill out our online survey to receive a fair, no-obligation offer for your San Antonio home.