“What to Do When You Inherit a House You Don’t Want to Keep”

“What to Do When You Inherit a House You Don’t Want to Keep”

Inheriting a house can feel like a blessing and a burden at the same time. Maybe it's your childhood home filled with memories, or maybe it's a property in another state that you've never even visited. Either way, if you're not planning to live there, you're probably wondering: What now?

The good news is you have options. The key is understanding what each one means for your time, money, and peace of mind.

Option 1: Sell It

This is the most common choice—and often the simplest.

When it makes sense:

• You don't want to manage a property from a distance
• The house needs work you can't (or don't want to) handle
• You'd rather have cash than deal with tenants, taxes, and maintenance

What to know:
You'll likely need to handle some basics before listing: clearing out belongings, making minor repairs, and deciding whether to sell as-is or invest in updates. In Rhode Island and Massachusetts, most inherited homes that are move-in ready sell within 40–60 days if priced right.

Real-world example:
Let's say you inherit a home in Cranston, RI, worth $350,000. After legal fees, real estate commissions, and minor clean-up costs, you might net around $315,000–$325,000. If the house needs significant work (new roof, outdated systems), selling as-is to an investor might bring $280,000–$300,000, but it closes faster with no hassle.

Tax consideration: If you sell relatively soon after inheriting, you may owe little to no capital gains tax due to the "step-up in basis" rule. Talk to a CPA to confirm.

Option 2: Rent It Out

If the property is in good shape and located in a strong rental market, keeping it as an investment might make sense.

When it makes sense:

• The house is already generating income (tenant in place)
• You want long-term cash flow and aren't in a rush for liquidity
• The property is in a desirable area with strong rental demand (think: near universities, hospitals, military bases)

What to know:
Being a landlord—especially from out of state—requires work. You'll need to manage (or pay someone to manage) tenants, repairs, taxes, insurance, and vacancies. Budget 1–2 months of rent per year for maintenance and another month for vacancy.

Real-world example:
You inherit a duplex in Worcester, MA. Each unit rents for $1,400/month, so you're collecting $2,800/month ($33,600/year). After property taxes ($6,000), insurance ($2,000), maintenance reserves ($3,500), and property management fees (10% = $3,360), you're netting around $18,740/year. Not bad—but only if you're comfortable being a landlord or paying someone to handle it.

Option 3: Keep It for Family Use

Some people choose to keep the home as a vacation property, family gathering spot, or place for relatives to live.

When it makes sense:

• The property has sentimental value
• It's in a location your family will actually use (beach house, mountain retreat)
• You can afford the carrying costs without rental income

What to know:
You'll still be responsible for property taxes, insurance, utilities, and upkeep—even if no one's living there full-time. Empty homes can also face higher insurance costs and are more vulnerable to break-ins or weather damage.

Option 4: Sell It to a Family Member

If another family member wants the house, you can negotiate a private sale.

When it makes sense:

• A sibling, cousin, or other relative wants to keep the property in the family
• You want to avoid realtor fees and the public market

What to know:
Even family sales should involve a formal purchase agreement, title transfer, and (ideally) an appraisal to establish fair market value. This protects everyone legally and ensures there are no tax issues down the road. Work with a real estate attorney to do it right.

The First Steps (No Matter What You Choose)

Before you make any big decisions, take care of these basics:

1. Probate the estate. The house can't be sold or transferred until it legally passes through probate (unless it was held in a trust). This process varies by state—Massachusetts and Rhode Island both have specific probate requirements.
2. Get the property appraised. Knowing the home's current value helps you make informed decisions and establishes your tax basis.
3. Secure and maintain the property. Change the locks, keep utilities on, check for damage, and maintain insurance. An empty home can deteriorate quickly.
4. Talk to professionals. Consult a probate attorney, CPA, and real estate agent who understands inherited properties. Each decision has financial and tax implications—get advice before you commit.

Final Thought

Inheriting a house is rarely simple, but it doesn't have to be overwhelming. Whether you sell, rent, keep, or pass it to another family member, the right choice depends on your goals, your finances, and how much time and energy you're willing to invest.

If you've recently inherited a property in Rhode Island or Massachusetts and aren't sure what to do next, I'm happy to walk you through your options with no pressure or obligation. Sometimes just talking it through with someone who knows the local market can make the path forward a lot clearer.

Written by: David Cherry
Licensed in RI & MA | Here to help you make informed decisions, not quick ones