Many people, find themselves the recipient of an inheritance they aren’t quite sure what to do with. One popular option is to invest the money in real estate. In our latest post, we offer tips for buying a house using an inheritance in Philadelphia!
When you receive an inheritance, it can be difficult to know exactly what to do with it. It often comes hand and hand with a great loss, causing emotions to run high. Before you do anything, take some time to breathe. You have many options to consider. Being hasty with your decision might cause you to squander the funds. Should you tuck it away in interest-bearing CDs and savings accounts? Invest in the stock market? Purchase real estate? Pay off your current debt? Maybe all of the above? If you receive a sizable inheritance, it is best to seek the counsel of your accountant, attorney, and financial planner.
Many people use their inheritance or a percentage of it, to buy real estate in the Philadelphia area. Buying a home with a inherited money is a great way to put the money toward something useful and not squander away the funds. Before you buy, we have provided a few questions to ask yourself below.
Should You Buy A Home In Cash?
Imagine, being able to purchase a house free and clear, right away! Some people will use the money to buy a house outright, eliminating a nagging monthly mortgage payment and immediately being able to put the house into their name. Others will use the inheritance to put 20% or more down on a house, saving the rest of the money or investing it elsewhere. Talk to your accountant or financial planner to determine which course of action will be best for you.
What Are Your Goals Long-Term?
Why do you want to buy real estate? Is it an investment? Or a house you plan on living in yourself? Are you looking for a house to raise a family in or simply a roof over your head? The amount you choose to spend or put toward a Philadelphia house should reflect these goals. Put thought into how you spend your inheritance. You should make the money work for you, not all victim to an impulsive buy. Real estate can help with both your long and short-term goals. It is considered by many to be one of the best ways you can invest your money.
Where Will You Find The Best Deals?
If you are looking for a great deal on a Philadelphia house, one of the best things you can do is buy directly from the source. Philly Off-Market Deals is a professional home seller who acquires low-cost properties, revitalizes them, and resells them at phenomenal prices. We too are looking for great deals. By working with Philly Off-Market Deals, you are able to utilize our experience and research in order to save you money on a home. If you choose to work with a Philadelphia real estate agent, take a look at older listing and houses that may not have photographed well in their listings. Foreclosures and bank owned properties are another great way to find deals, however, to buy this kind of property, it is best to have some real estate and home repair experience under your belt.
How Will The Inheritance and Real Estate Purchase Affect Your Taxes?
An inheritance isn’t typically considered income, so it doesn’t have to be reported on your state or federal income taxes. When you own a home, there are many tax benefits including mortgage interest deduction, and the SALT deduction, (State and Local Taxes.) However, recent tax changes have changed the way these items are deducted. Speak to your accountant to understand the tax implications for your personal situation.