My father died recently and left me and two siblings a house with no mortgage. I am in the process of being declared executor of the will. My brother goes to the house every weekend for a “staycation,” however my sister and I live in other states and can only return to the hometown a few times per year.
My sister and I think this is the opportune time to sell the house and divide our inheritance, but my brother thinks we should hold on to it as it is increasing in value. Of course, it will incur some expenses for upkeep, insurance, taxes and utility.
Is it a better climate to hold it as an investment or to sell it and then invest the money into stocks or retirement accounts? I am 65, brother and sister are 60 and 57.
Feuding over the Family Home
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I’m so sorry for your loss, and I can understand how uncomfortable a position you’re now in. My colleagues at MarketWatch often hear from readers in similarly stressful predicaments. As executor of your parent’s estate, you have the unenviable task of divvying up their possessions while balancing others’ emotions — all while needing to grieve on your own. I hope that you’re taking time for yourself to work through your emotions surround your father’s passing.
Onto the matter at hand: It’s clear to me that you suspect your brother has an ulterior motive in suggesting that the family keep the home. After all, he’s the one who has essentially inherited a vacation home for him to use alone, and it appears he is only partially responsible for its upkeep and taxes. You’re undoubtedly resentful of this set up.
The real-estate market remains hot right now, and homes in many parts of the country see multiple offers that drive the ultimate sales price even higher than what you may list it for. Especially in the suburbs, there has been such a shortage of homes on the market that buyers will put in an offer for virtually any property that comes on the market.
For you and your siblings that could be good news, given that it might mean that you wouldn’t have to do much work to get the home listing-ready. Of course, all real estate is local. You don’t say where your father’s home was located, and that could be a factor in whether or not it’s worthwhile to sell. In a hot market like Boise, Idaho, it’s practically a no-brainer that you should sell. In rural Iowa though, that might not be the case.
Homes in many parts of the country see multiple offers that drive the ultimate sales price even higher than what you may list it for.
Your brother is generally correct in his view that the home will continue to grow in value. The jury is still out on whether or not a bubble is forming in real estate. Many economists say no, but some who were burned by the last housing market crash advise that Americans approach the housing market with more caution. Some observers think the real-estate market could be cooling, as buyers grow more and more concerned about affordability.
But even if the bubble bursts, that doesn’t mean you’d lose money on the home. You don’t have a mortgage to worry about, and if you could keep it for long enough you’ll see its value grow whether or not there’s a downturn.
Given all that, my inclination is that you and your siblings should sell the home, unless you live in a part of the country where the real-estate market isn’t so hot. Then you can split the money among the three of you to do whatsoever you want with it.
If your brother is using the home more, then he should pay more in upkeep and property taxes.
Let’s say your brother decides he really wants a second home to hole up in on the weekends, or just an investment property. Then, he can use his portion of the proceeds of the sale of your father’s home as a down payment for one. If he really wants to keep your late father’s home so badly, he can offer to buy you and your sister out. Then, you and your sister can put the funds from the home’s sale toward more liquid investments, which may come in handy as you near retirement.
If you do keep the home, you need to set some clear boundaries and have a coordinated plan for what to do with the property. It’s not appropriate for your brother to use it as a vacation home for himself, while you and your sister pay equal shares of the maintenance, utilities and taxes. If he’s using the home more, then he should pay more.
Should you all keep the home, I strongly suggest the three of you consider turning it into an investment property and renting it out — either to long-term tenants or on a platform like Airbnb
As your brother is close by, he could help to manage the property — perhaps for a greater sum of the profits — and then you all can hopefully receive some nice passive income after expenses are accounted for. Alternatively, you could farm it out to a property-management company.
A few years down the road, you can then revisit the conversation of whether to sell.