To sell or not to sell? What about a house you don't live in

5/7/2021 - Inheriting real estate can mean a great opportunity for someone. In other cases, it can bring unnecessary effort and financial loss. It depends on the condition of the property and also on the location in which it is located.

Profit or loss? It depends on the condition of the property. If the property is in good condition and in the desired location, it is not a problem. The ideal way is to rent it after minor repairs, or possibly move into it. The rental will bring a regular profit. If the owner has been living in a rented or worse apartment, such a property represents an opportunity to own a home. However, a property in poor condition can be more of a gift than a reason for joy. If you inherit a house or a cottage that requires costly repairs or even a total reconstruction, you need to consider the real options and think about what awaits you in the future. What about a dilapidated property? . It is sometimes difficult to decide on the sale of a property in which you spent your holidays with your grandparents, or where you were even born. On the other hand, isn't a better solution than letting the property deteriorate, selling it, and thus giving it a chance for a new life? If you are considering renovating and renting the property, you need to carefully calculate the difficulty of the investment and its return. First of all, you need to have the technical condition assessed by experts from the field of construction. Furthermore, it will be necessary to calculate the costs of the reconstruction project and carry it out in such a way that it meets current housing standards, including low energy consumption. Expect that the preliminary calculation will be more like half, at most two-thirds of the price you will have to pay later. The prices of construction works and materials are continuously increasing. In addition, in an old, unmaintained property, there will always be some hidden defect that will make the reconstruction more expensive and longer. Financing may not be easy. If, for example, you already have a mortgage for your own apartment, the bank will take this into account when assessing the next loan. The ability to pay off two loans at the same time may no longer be within your options. Even if you wanted to rent the property, you would have to convince the bank to accept this argument and prove that achieving the calculated returns is realistic in the given location and at the given time. Another problem may be securing the loan. If the property is not in good condition, it may not be enough for the bank as collateral. It can be assumed that the loan will need to be secured in another way. And this can not only complicate the process of granting a loan, but can often be reflected in a higher interest rate. Or, due to the impossibility of securing it with another property or in another way, you will not be able to get it at all. If the building is in really bad condition and you do not urgently need it for your own living, real estate experts recommend selling the property while there is interest in it. And that is currently on the domestic market. If you do not do so, it means at least continuously investing in the maintenance of the property, the condition of which will rather deteriorate. An old, unmaintained property means significant investment in reconstruction and significant operating costs. In addition, if it is located in an unattractive location, its sale may not even bring back the invested funds in the future. Selling at a time when there is interest in domestic real estate is therefore the best solution. Are you interested in the topic? We recommend: Do you have multiple properties and children? Distribute your property on time Gifting real estate to children. When is it possible to return the gift? Are you afraid that the children from your husband's first marriage will drive you out of the house? How to prevent it Donating real estate with an order restricts the owner's disposal rights How to donate real estate?

Jindra Svitáková