What you need to know about Inheriting a house that is paid off in Oklahoma City
Inheriting a house can be a blessing and a curse sometimes. If the house needs repairs, who is going to make them and pay for them? Are you going to rent it out? Do you want to be a landlord? What about insurance? What if someone breaks in?
There are plenty of things to worry about for sure. However, there are also positives to inheriting a house that is paid off in Oklahoma City as well. For example, you don’t have to worry about mortgage payments or foreclosure. You still have to pay taxes, utilities, and insurance but no mortgage is a huge benefit. With a house that is paid off you have more options on what you can do with it and how you can sell it.
As a company that buys many houses in every month, we have dealt with many, many folks that inherited houses and helped them either sell it or figure out what to do. Below are a few things you need to know about inheriting a house that is paid off in Oklahoma City from our own knowledge and experiences of others we’ve worked with…
Tip #1 – Leverage your equity with a bank
If the house is paid off, a bank will give you a loan against some of your equity in the house. If you need some quick cash with a low interest rate, this is an option you should consider. Keep in mind the bank will get an appraisal on the house and it needs to be in at least decent condition to get such a loan. A bank typically won’t lend money against a house that is falling apart or not livable though.
Tip #2 – Sell your house for 2x what it is worth
Most people don’t know that there are more ways than one to sell a house, especially if it is paid off. The normal way is what 90% of homeowners know and do – you want to sell a house, you find a buyer, they get a loan for it from the bank, and you get a big check at closing.
There is another way though. You can end up making 2x what the house is worth in the end. It’s called owner financing. It’s been around for decades and works like this: you want to sell a house, you find a buyer, instead of getting a loan from the bank you agree on a price and the buyer pays you this amount over time with interest. Just like a bank, you are guaranteed the buyer will pay by placing a lien against the house. If they don’t pay, you take it back. In the end, if you sell a house for $100,000 this way, you can collect an extra $552 dollars per month for 30 years and net $198,000 in the end.
Tip #3 – Keep insurance on the house
This one is simple. We can’t be clear enough though. Whether you are living in the house or renting it out or it is empty….keep. insurance. on. the. house.
Tip #4 – Renting isn’t as bad as it seems
A good long-term choice is to rent the house out. It’s a great investment and form of retirement. If you don’t want to manage it you can always pay a company to manage the property for you also. The key is to know your costs. Vacancy will cost you 8-10% of your rents each month. Repairs will cost you 10-12% of your rents each month. You have to factor in taxes and insurance also. If you have someone manage the property that will cost you another 8-10% a month.
Tip #5 – Sell it the EASY way
Our company buys houses all the time. We make it EASY to sell one by paying all closing costs and purchasing homes as-is with no repairs or cleaning required. This means you can inherit a house that needs lots of repairs and is full of junk and turn it into cash. We buy many houses that need work but also nicer ones also. If your home doesn’t need any work, we’ll buy it also and save you the hassle of cleaning, paying a real estate agent plus closing costs, and dealing with traditional buyers.
Hopefully these tips helped you if you are inheriting a house that is paid off in Oklahoma City. We’ve worked with many people in this same situation and are ready to help you if needed. If you are ready to sell a home you are inheriting or just have questions, call or text us at (405) 673-4901.
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