Introduction
Many of us face complex decisions when it comes to passing down assets to our loved ones. I empathize with the predicament faced by a woman whose mother left her the family home, as my daughter finds herself in a similar situation. Therefore, I can offer valuable guidance on this matter.
The Challenge Faced by My Daughter
As I contemplate leaving my daughter my cherished house in my will, there is a crucial factor that needs consideration. My daughter possesses a physical disability that affects her ability to work full-time and hampers her financial capabilities.
Currently, she resides in an apartment conveniently located near her workplace, demonstrating her desire not to uproot her life and move into the inherited property.
Understanding the Financial Aspect
Let me provide you with some essential financial information regarding my house. The property holds an approximate value of $450,000. However, I still have a loan balance of $248,000, which I recently refinanced at a favorable 3.35% mortgage rate.
Exploring the Options: Lease or Sell?
Considering my daughter’s circumstances, I have suggested two potential choices for her to contemplate:
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Leasing the House: Upon inheriting the property, my daughter can opt to lease it. This decision presents an opportunity for her to generate an income of about $2,800 per month. In light of the monthly mortgage payment amounting to just under $1,600, this additional revenue would significantly contribute towards meeting her rental expenses.
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Selling the House: Alternatively, my daughter can decide to sell the property and potentially secure around $200,000 from the sale proceeds.
Seeking Advice: Lease or Sell?
Given these options, it remains unclear whether my daughter should pursue leasing or selling the family home. Hence, I am seeking guidance on the best course of action to ensure her financial stability in the long run.
The Big Move: Assisting with Real Estate Dilemmas
Dear Trying,
In response to your inquiry, I would urge you to recommend that your daughter lease the house if she outlives you. However, it is crucial to start preparing her for this potential scenario to ensure a smooth transition into the role of a landlord. Together, you can explore finding suitable tenants, organizing rent payments, and maintaining the property’s upkeep.
Best wishes,
Property Management Assistance
If you find yourself unable to take on the responsibility of managing your property, you may consider researching a property-management company that can assist you. These companies typically charge a fee of around 8% to 12% of the monthly rate.
Benefits of Renting
One great advantage of leasing your property is that it provides you with some extra income after paying the rent. This additional income can boost your overall financial stability and even help you set aside some money for unexpected emergencies.
Building Towards Home Ownership
In America, many individuals who are currently renting have the dream of owning their own homes. By leasing her property, you have helped set her on the path towards a successful and secure retirement. Additionally, the 3.35% mortgage interest rate she received was truly remarkable and may be difficult to come by again soon.
Considerations for Financial Needs
While it’s important to address any potential medical issues or other financial needs in the medium- to long-term, if there is no immediate need to utilize the $200,000, it might be beneficial to explore alternative options.
Gratitude for Generosity
I want to express my sincere appreciation for all that you have done and will continue to do for your daughter. Your kind act of leaving her your home as an inheritance provides her with a significant financial advantage.
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