Should I take over deceased sister house as a rental? (profit, property taxes)
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If you can NET the $110,000 and you still want to be a LL...
find a property better suited to the purpose.
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Originally Posted by professorkev
If we did do this I would just pay a small sum to the siblings that would cover some of their loss (its the right/ethical ungreedy thing to do and it would all be signed off on so there is no concern there).
The only "Right and Ethical" thing to do if they are disinterested in renting the place is to pay each of the siblings $15,000 (their theoretical share of the equity.)
For renting, you and your wife would take a third of the proceeds, $400/month. A typical management fee is in the area of 10%, so if you're managing the property and the other siblings aren't involved, you could take an extra $120/month. Of course, you would have to get them to agree to it. And, then they would have to agree to be pay their share when the furnace goes out.
But depending on the market, the 1% monthly rent-to-value of the home isn't bad. People who go in and look for significantly better usually end up trying to weed through a lesser class of tenant.
Is the home in an area that would attract a desireable profile in potential renters?
No I would be living in the area. The others would be "bought out" and legal documents would clarify all that so that wouldn't be a concern.
Even considering just renting it though her estate for the year. Who knows. We'll decide this weekend and double check the potential #'s (stress potential). I don't think we "have to" update electrical, but selling it the FHA will require the fuse box to be converted over to a circuit breaker box est. $2K)
Agree, hiring maintenance company may be the way to go, but that too costs and would probably be 20$ of estimated profit, but then again that's a write off. So many things to cover,
The only "Right and Ethical" thing to do if they are disinterested in renting the place is to pay each of the siblings $15,000 (their theoretical share of the equity.)
For renting, you and your wife would take a third of the proceeds, $400/month. A typical management fee is in the area of 10%, so if you're managing the property and the other siblings aren't involved, you could take an extra $120/month. Of course, you would have to get them to agree to it. And, then they would have to agree to be pay their share when the furnace goes out.
But depending on the market, the 1% monthly rent-to-value of the home isn't bad. People who go in and look for significantly better usually end up trying to weed through a lesser class of tenant.
Is the home in an area that would attract a desireable profile in potential renters?
Their share wouldn't be near that much, due to other estate expenses left, debts; we are only talking about a few thousand.
About 'taking it over'. Is there a loan? If you got a new loan would you...and the house...qualify?
BUT...first what about probate? There can be a whole thing you have to do even if you and your sisters were on a trust with your sister before she passed. Because your sisters have to legally pass their shares on to you. The dollar amount of the estate to be probated varies. But it is based on the entire estate, not just the house. (May not make a difference in your case.)
During probate you need to maintain and insure the house and cannot sell it. Nor sure about renting.
You need court authority to sell it.
And mixing the estate with personal money is a no-no.
You do need an attorney's advice on how to proceed. Going through probate is a whole thing and can take a year or more.
During probate you need to maintain and insure the house and cannot (simply) sell it.
Because the property isn't the OP's (yet).
It is held in "the estate of" and not yours to (simply) sell.
But the executor can ask the Court for permission to dispose of any Estate asset...
and with a few basic tees crossed and eyes dotted... you'll be given permission to.
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You do need an attorney's advice on how to proceed.
Yes they do.
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Going through probate is a whole thing and can take a year or more.
Which is one of the reasons why the Court will usually not interfere with a responsible sale.
If nothing else the CASH makes resolution of the equity matters simpler.
I'm the executor/fudiciary and one sister. No will was left and we have already begun the probabte process. I would be taking a mortgage out on it and there should be no problem getting one valued for it. in worse case scenario I would just buy as a cash deal. Meeting with a lawyer on Tuesday to discuss the finer points/process. but yes court typically approves the sale but see no reason why they wouldn't - its all on the up/up. I do want to call them to find out the rules of renting out the property if possible while it's under estate status. Typically estates (small) are settled in under a year in our county.
I'm the executor/fudiciary and one sister.
No will was left... Meeting with a lawyer on Tuesday to discuss the finer points/process.
Seriously reconsider the idea of making it into a rental.
If you're absolutely bound and determined to be a landlord...
get whatever CASH you might net from a sale...
and use that to buy a property better suited to the purpose.
Like the name MrRational.... YEsI think a landlord friend of mine (who owns over 6 properties and bought several through auctions and foreclosures (he's a good landlord) was trying to tell me. He's mentioned there are alot of good deals out there to be had at half the cost and more for the buck.
One way to look at it "would I buy it for a rental if it wasn't my sister?" the answer would be no. Not because it's not nice but rather it's not ideal (other side of town, older home) This is an opportunity that sadly fell into my lap. positive is that it's nice and I would get immediate equity. (and our markets don't fluctuate too much around here)
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