For most people, their most valuable asset is their house, and it’ll often be left to their children or grandchildren. While this is a lovely gift from your deceased relatives, it can leave many people wondering what to do with the place.

Luckily, there are lots of options available depending on your finances, your emotional attachment to the house, and your future plans. Here are some things you should consider doing when you’ve inherited a house:

Get financial advice

Rules on inheritance tax vary from country to county, and if you’re sharing your inheritance with siblings or other relatives, then things can get more complex. Property is part of a deceased person’s estate, so there may well be debts to pay, and it is worth getting some independent financial advice to discuss the tax implications if you were to sell versus keeping it as a second property.

There may also be a remaining mortgage on the property, so you may inherit the responsibility for payments. If this is going to cause you financial difficulties, then it’s worth speaking to Citizens Advice or seeking legal help.

Moving into the property

If you have a strong, emotional attachment to the property, then it might be a natural choice to move into the property. If the home was owned outright by the deceased, then you may be mortgage-free, but if it was part-mortgaged, then you may need to apply for your own mortgage for the percentage not yet paid. Another thing is to consider is whether you’ll be selling your old home.

If you have two homes because you’ve inherited one, you’ll need to let HMRC know within two years which one is your ‘main residence’, if you sell the one that is the extra, you may have to pay capital gains tax.

Sell up

One of the most popular options is to simply sell the property, as this can mean a cash lump sum, plus less hassle having to deal with upkeep. Again, you’ll need to consider things like capital gains tax, estate agent fees, and other expenses.

Some people use services such as Quick Move Now to sell an inherited home, as it means they’ll get a quick cash sale without fees. Whichever way you sell, if the estate is worth over a certain amount, currently £325,000 in the UK, then inheritance tax will also be payable.

Rent it out

If the property is owned outright, then renting it out could be a good money maker in the long term, and it gives you time to consider your options. Rents are getting higher in many places, but it’s worth noting that landlords now pay more tax due to changes in the 2015 budget. You’ll have to pay taxes on your annual turnover, and if you have months where the property is empty, then this means no income.

It’s important to do your research and ensure you’re actually making a profit each month, and don’t forget to keep money aside for landlord insurance, repairs, and other expenses.

If you’ve recently inherited a property, make sure you make the most of this wonderful gift by getting proper financial advice. It’s worth considering all your options before you commit to anything, and you’ll need to ensure that you find out which taxes you’re liable to pay. However, whether you take the short term option and sell the house, or decide to rent it out for a long term income, you could potentially make a lot of money from your relative’s home.

What Are Your Options if You Inherit a House? is a post from: When Life Gives You Lemons. Did you like the post? Follow me on Twitter, like me on Facebook, or hop on over to my blog and leave me your feedback.