First, we’re so sorry for your loss. This can be a very challenging time for many reasons, and dealing with property ownership is tough at the best of times. Especially if you are dealing with the pain of a relative who has deceased.
You’re thinking, “I inherited a house in Calgary, what to do with this property?” Should I rent it? Should I sell it? Do I get this listing up on the MLS right away? Who can I talk to about the Canadian inheritance tax? Will I get hammered with capital gains because it isn’t my primary residence in Calgary, Alberta?
Tons of options open for you, but…
… If you inherited a house in Calgary, we can help.
We’re seasoned investors in Calgary real estate, and we’re looking to buy several houses each month in the Calgary Alberta area. Every month we get calls from those who have inherited a house in Calgary and are looking to sell the property… so the info below includes some tips to help you navigate the process.
I Inherited A House In Calgary, What’s Next?
Here’s a few important considerations to help you make the right decision:
1) Make sure the mortgage is paid.
This may sound obvious, but if the person who left you a property also had a mortgage (unless it had no mortgage and was paid off, which is great!), you have to pay it (assuming you want to keep the property). Some banks will allow you to assume the loan, while others may force you to refinance into a new loan. If you don’t qualify for a new loan, renting may not be an option for you. Another aspect of this you will need to consider is if you need to go through the probate process or not. With real estate inheritance this is typically necessary if the deceased person owned the real estate in their name, or with others. The reason for this is because the Land Titles office would need a document called “The Grant Of Probate” in order to transfer the title to the beneficiary. Here is an excellent article the details the probate in Alberta.
2) The investment is only as good as the manager.
If you find yourself overwhelmed by the demands of brokers, property maintenance, tenant issues, rent collection, and the complexities of property management, it may be time to consider enlisting the services of a qualified professional in Calgary. Alternatively, you could explore the option of listing the property or selling your property fast for all cash. Many individuals who inherit homes opt to retain ownership and generate additional income through renting. While this can be a lucrative strategy, it requires efficient property management and the willingness to handle the potential challenges associated with tenants and property upkeep.
3) Property ownership costs money.
It’s rare to see a building that’s been perfectly maintained. Most inherited houses need major improvements before listing in Calgary, Alberta.
Consider hiring a professional property inspector, or trusted renovation contractor, to give you a detailed rundown on what you’ll need to do within the next five years, along with estimated costs. Surprises are very, very expensive. This can help to give you an idea if hanging onto the property will be a good idea in the long run and the capital expenditures that are going to be required to keep the property rented. If you get word that within the next few years you need to replace a furnace, roof, and have new siding installed this could be upwards of a $30,000 renovation that can’t be avoided. It is best to know these ahead of time. At Northgate House Buyers we don’t shy away from expensive repairs so please reach out to us if you would rather keep that money in your pocket and sell to us.
4) Selling a property for top dollar costs money.
If you don’t want to deal with making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. We buy Calgary houses for cash, as-is.
5) If the market will continue to grow faster than your other options, hang on to the investment.
Discover the true value of your property compared to the advantages of renting in Calgary. If leveraging your property’s equity for higher returns elsewhere is feasible, seize the opportunity. Conversely, if you lack superior investment options and the local market is on the upswing, holding onto your real estate could prove lucrative. Successful real estate investing hinges on your ability to interpret market trends accurately.
6) The government always wants a piece of the action, especially in Canada.
Don’t forget to discuss your inheritance with tax and legal professionals before you take action. There are major property and income tax consequences that will dramatically impact the cost of owning your investment.
7) Consider all your options.
In certain situations we may be able to help you structure a lease-option agreement that allows you to rent and sell at the same time – capturing the best of both worlds. These kinds of deals can be complicated, but our Calgary investment experience can help you win.
8) Compare a few scenarios.
We’ll help you determine prices for any property near Calgary – if you sold it today without doing any work, the highest price the market will bare, and the projected value of keeping it as a rental (along with the costs).