Thinking about Selling Your Inherited House?
When someone calls me to come see their house and make an offer on it, I never know what is going to happen. I usually meet the owner at the front door and I'm invited in for a tour. Sometimes, though, the owner doesn't live in the house. We usually have to schedule a time to see the house that is convenient for the tenants, too. On many occasions, I find out that the tenants are relatives.
Why Renting to Relatives = Trouble
I also find out that the relatives haven't paid rent in months and what they were paying was well-below market rent. Because the house isn't producing much income, the owner hasn't kept up on repairs either. Do you see the vicious cycle developing?
The argument on the owners side is: "I offered my relatives a low monthly rent because they are family." The relatives then say "There are lots of repairs that need to be made, so we shouldn't have to pay any more in rent". Then the toilet starts backing up on a regularly basis. The owner doesn't make the expensive repair. The tenant/relatives don't think they should have to pay rent at all when the house isn't being maintained. And the problem worsens. Because it's a family issue, the problem festers, arguments start, etc. Meanwhile, the house isn't being maintained.
Now you have bad blood in the family. And you have a house that is developing major maintenance issues that cost more the longer they go unfixed. I can't tell you how many times I have seen this. It's not enjoyable for anyone involved. But, left unresolved, the house will lose value because of the repairs.
Oh and did I mention how well relatives tend to take care of their family's house? I have never ever seen a house that was well-maintained when the situation is owner and tenant are related.
So, if you are in a similar situation, do you think it's time to sell? Or if you are thinking of renting to family, think twice.