I Inherited a House, What To Do? – Should I Rent or Sell in Chicago?

Selling an Inherited House in Chicago

Should I Rent or Sell
My Inherited House in Chicago?

Inheriting a house is often bitter-sweet for most people. Although losing a loved one is never easy, leaving a house for you shows their diligence and hard work to ensure your family has a place to call home.

As the beneficiary, you have to decide how to carry on your loved ones’ legacy. You can choose to rent or sell the house in Chicago; the goal is to select the most suitable way to optimize the property’s value, potential, and profit.

In most cases, inherited houses are in poor condition, leaving you with additional responsibility. You may lack the time and funds required to renovate the home, or the distance can make it challenging for you and your family to move into the house.

So, should I rent or sell in Chicago? Read on to know what to do after you inherit a house in Chicago IL.

Steps to Take After Inheriting
a House in Chicago

Maintaining an empty house in Chicago is expensive. Regardless of whether someone lives in it, it would be best if you were up to date on the taxes, utilities, and maintenance costs.

If the house in Chicago remains unoccupied for an extended period, deterioration only adds to the maintenance costs. When you decide to sell it, the renovations costs you’ll incur will be financially draining.

This is especially true in Chicago due to the harsh winter conditions. Before you decide on the best way forward, it’s always best to consult a professional who has experience with similar situations.

It also helps to be well-informed on essential aspects to avoid getting blind-sided along the way. They are such as:

1.      Ensure the Mortgage is Paid

It’s essential to be aware that if your loved one leaves an outstanding mortgage on the house, the balance still requires payment.

If you intend to retain the property for some time, you can contact the bank to determine whether it’s possible to assume the loan payments. Alternatively, you can refinance the mortgage to get a new loan that you’re solely responsible for.

Once you acquire the house in Chicago, any outstanding debts associated with it are your responsibility.

2.      Property Ownership is Expensive

Most inherited house in Chicago require significant renovations to repair damages and update the property to align with the current building codes. Building codes specify what areas need work, such as plumbing and electrical systems, windows, floors, and sewer systems.

You’ll also need approvals and permits before starting the renovations. It’s best to hire a professional property inspector familiar with the local codes and regulations to help you out.

They can provide you with a comprehensive list of the upgrades and repairs required within the next five years and cost estimations.

3.      Property Taxes Continue Accruing.

In Chicago, property taxes are due bi-annually, and the property tax arrears require clearance regardless of the previous owner.

For instance, if you inherited the house in Chicago in 2020, you’ll have to pay property taxes that accumulated in 2019 even though you didn’t own the home at that time.

You can start with an online check to confirm whether the previous year’s taxes are up to date. This information is available on the county tax assessor’s website, where you can also check when the next payment is due.

Get ready to pay higher tax amounts than the previous owner since the property requires re-assessment once you inherit it.

It’s also advisable to check the county recorder of deeds’ website for any judgments or liens against the property. Most people are unaware that a third party can buy the unpaid taxes for a right to the property’s title.

Before making any move, consider consulting a tax or legal professional to avoid property and income tax consequences that will affect the cost and resale of the house in Chicago.

If you prefer selling your home, keep in mind that you can only do so if designated in the will. You’ll need to get authority to sell from the Chicago probate court without a will.

4.      Property Management

Renting out the inherited house in Chicago for extra income is a fantastic idea. However, you have to consider managing the property, maintenance, collecting rent, and dealing with brokers and tenants.

Most people choose to hire a professional property manager who has the proper experience to handle all management aspects. Alternatively, you can offer the house for sale.

Renting Out an Inherited Property in Chicago

The inherited house’s location can be ideal, such as a suburban or trendy neighborhood. In such a case, you’ll benefit more from renting it out.

As a first-time landlord, there are crucial tasks you need to fulfill before sourcing for tenants, such as:

  • Refinancing the existing mortgage to change it to your name
  • A professional property inspection to identify and fix any issues
  • Acquiring a landlord’s insurance policy
  • Upgrading the inherited house with current appliances and modern styles to attract renters
  • Determining essential policies and regulations, such as smoking and pets
  • Market research to compare similar rental properties to determine the rental price
  • Creating a Residential Lease Agreement

Although renting out the inherited house helps supplement your income, it gives you additional responsibilities as the landlord.

If you have limited time to focus on the property, you should consider hiring a property manager or independent contractor to help with the management. Be sure to sign a service agreement to protect your interests.

Should I Rent or Sell Chicago House

Selling an Inherited House in Chicago

Selling an inherited house in Chicago with sentimental value or personal significance is often challenging. However, selling is the best option in some cases, such as:

  • When you’re sharing the inheritance with other family members such as siblings, selling the house allows equal division of the proceeds from the sale.
  • When you’re unable to keep up with the mortgage payments and maintenance costs
  • When there’s significant deterioration, and you’re working with a limited budget
  • When the inherited house is very far away, or you’re not willing to relocate

If you decide to sell, there are additional obligations involved in inheritance cases that include:

  • Waiting for and adhering to probate court decisions regarding the estate
  • Correctly reporting sales proceeds when filing your income taxes
  • Sharing personal belongings from the house with friends and family
  • Making timely payments for utilities, property taxes, mortgage, and homeowner’s insurance when the house is in your name

Should I Rent or Sell in Chicago?

Deciding what to do to your inherited house in Chicago doesn’t have to be challenging. Your choice to rent or sell depends on your current financial situation.

The best way to honor the gift from your loved one is by making a decision that is most suitable for you and other family members.

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