When Selling Grandma's House Makes Sense

Assets are meant to serve multiple purposes. Homes are the tricky ones, because a home carries sentimental value. You build up emotionally with it. You have shared memories in it.

But after some time, especially when decades pass and family members have moved on from the home, meaning nobody physically lives in it anymore, there are decisions that need to be made. All of them are in the interest of protecting the asset.

Three good choices

A family that inherits a home has options, and these are all good choices:

• Hold on to the home and rent it.
• Sell it as is.
• Renovate it some and try to get top value for it in your market.

The worst outcome is indecision

The trouble starts when a family can't decide on any of the above. It might be competing priorities. It might be time. It might be differences in opinion among the multiple family members and heirs of the property.

That is when I often see indecision set in, and that might be the worst outcome. Now there is no rental income being collected, or it is negligible once it is spread across the multiple people who need to have their hands in it. Or the family never sells, and the property ends up neglected. It becomes more of a liability, something that is only racking up property taxes, maintenance and capital expenditures.

Look at the numbers both ways

Families should really look at all the pros and cons. What would the cash flow be if you hold on to it as a rental? What would the net proceeds be if you sell it on the market? Look at both before you decide.

Selling does not make you a failure

The biggest thing is not telling yourself that just because you sell grandma's house, you are some type of failure.

If the sale can create generational wealth in another asset class, or produce multiple down payments for her children or grandchildren, then that is a good use of the home.

Every family is different, and inherited property can raise legal and tax questions that vary by state, so talk with a licensed professional about yours. If you want an agent to help you weigh the options, start at findablackagent.com.