Before investing in any property, you must take necessary precautions to protect yourself from losses and other issues, especially if you plan to resell it. Inheritance properties are among the riskiest residential asset classes in the market, as these properties are often mired in legal tussles.

Therefore, in this post, we’ll discuss whether or not it’s wise to purchase an inherited property for investment. Moreover, we’ll share five precautionary steps to take if you decide to go down this investment route.

Is Investing in an Inheritance Property Worth It?

When a seller puts an inheritance property on the market, they’re usually in a hurry to get rid of it. Therefore, investors looking for a bargain can buy it for a much lower price than the average market price. However, in many cases, buying an inherited property can result in a legal battle with another heir looking to buy the house. Legal battles are quite common in cases where properties have more than one heir.

While Article 34 of the Mortgage Law protects buyers from these circumstances, it can still result in a long and stressful experience. Even if you manage to buy the property, you must wait at least two years to guarantee the purchase. If another heir with greater rights steps in during this period, they can cancel your purchase.

5 Precautionary Steps to Take Before Buying an Inheritance Property

1. Verify the Original Owner’s Details

The first thing you need to do when buying an inheritance property for investment is to thoroughly check the owner’s title documents along with any will, trust, and tax documents.

2. Check the Succession Documents

Next, you should check the details of the inheritance to learn about the seller’s relationship with the deceased owner. Doing so will also let you know if any other heirs may have a claim on the property.

3. Add an Indemnity Clause to Your Purchase

One of the best ways to protect your investment is to add an indemnity clause in the sale deed with the seller and a local court. While this might not prevent other heirs from challenging you, it can strengthen your case and even allow you to set a higher resale price.

4. Make All Legal Heirs Witnesses

The smartest move you can make to protect your inheritance property investment is making all property heirs witnesses to the transaction. Doing so can prevent anyone from challenging you in court for ownership since they all mutually agreed to the property’s sale.

5. Check for Any Impending Property Cases

Finally, before finalizing your decision, you should check if there are any court cases on the property, such as probate. In many cases, it’s not just heirs battling each other for ownership. Disputes can arise from anywhere, including friends or business partners of the deceased, the owner’s spouse, and other third parties.

Wrapping Up

Inheritance properties are an excellent choice for investors looking to score a bargain in the market, even if it means participating in legal tussles with heirs and third parties. However, before proceeding, you should hire an experienced estate lawyer to help you determine whether a particular inherited property is worth the investment.

For more interesting reads related to real estate investing, tune into CHRE immediately. You can also explore our vast options of inheritance properties in Rio Grande Valley.