A total of 340,000 properties were inherited in the United States in 2025, and inheriting a house or property accounts for anywhere from 7% of total real estate transactions in some states to up to 18% of total real estate transactions in other states like California. While here in Missouri that number is closer to the national average, that is still a significant amount of houses.
Families or individuals like you dealing with an inherited house are some of the people I help most often, in fact every month I get calls from those who have inherited a house and need help figuring out what to do with it next.
So here is a breakdown of what a random selection of 500 inheritors thought they would do with an inherited house:
- 36% plan to keep and rent it out
- 35% plan to keep it as their primary residence
- 24% plan to sell within 12 months
- 11% plan to sell after 12+ months
- 8% plan to transfer to a family member
And here is a breakdown of what that selection of 500 inheritors actually did with the inherited house:
- 33% kept it as their primary residence
- 30% sold after 12+ months
- 26% sold within 12 months
- 17% kept it and rented it out
- 6% transferred to another family member
- 6% haven’t done anything yet
Notably, the difference between those that thought they would rent it versus those that actually rented it was a significant 19%. Also, 56% sold it.
Looking at these figures indicates that future heirs underestimate the practical and financial aspects of holding onto an inherited house, not to mention the added emotional considerations.
First:
- mortgages
- utilities
- maintenance expenses
- property taxes
all on top of existing financial needs all affect the inheritors fiscally.
Second:
- physical maintenance
- upkeep
- repairs
- organizing
- decluttering
- cleaning out the house
all affect inheritors physically through effort or time.
Third:
- family disagreements
- unresolved conflicts
- uneven distribution of funds
- uneven allocation of care by dependents to the previous owners
also affects the disposition of an inherited property. Although not possible to measure or quantify, these emotional problems are often the most difficult problems to solve.
I Inherited A House, What Should I do Next?
Consider the costs and expenses of keeping it:
Probate or Court Fees (3% – 10%): If the property has to go through court-supervised probate, attorney and court fees can eat up a big chunk of the estate’s value.
Annual Maintenance (1% – 3%): Vacant and inherited properties require ongoing upkeep, utilities, and repairs, which generally cost 1% to 3% of the home’s value annually
Property Taxes and Insurance (2-5%): Once a house is no longer under a homestead exemption, property taxes will go up, and here in Houston they can be pretty high, especially in some places where there is taxes due to the county and to a separate school taxing entity. Insurance for a non owner occupied or vacant house can also range from 1-2% of the house’s value, to much higher if it is coastal or in the 100-year flood plain.
Mortgage Expenses (0-?): If the house is paid off, of course the cost of this item is zero, but if there is an outstanding mortgage, that payment still has to be made. In some cases you can keep the loan, in other cases you can assume the loan, but in many cases you must either refinance the loan or pay it off outright.
Next consider the costs and expense of selling it on the market:
Selling Costs (8% – 10%): If you decide to sell the home, expect to pay roughly 5-6% real estate broker/agent commissions, plus 2-4% in standard closing costs and escrow fees.
Capital Gains Tax (0% – 20%): Federal long-term capital gains apply to any profit made after the property’s value at the time of the owner’s death (known as a “stepped-up basis”). State taxes may increase this rate depending on your location.
Preparations Costs (~): In some cases this can be zero, but in most cases real estate agents don’t want to sell a house full of things that hasn’t been cleaned out and prepared for a sale. A cleanout can cost anywhere from $5,000 up to $100,000 depending on the size of the house, the amount of stuff, and any other surprises in the case of hoarder houses.
Finally consider the costs and expenses of renting it:
Property Management (10-20% of rent): A property manager will find a suitable tenant then collect the rent and manage maintenance and expenses for a property. Most will charge 1 month’s rent to secure a tenant, then 10-20% of gross rents per month. In addition, while that house is vacant and in search of a tenant, the expenses still keep accruing.
Increased Property Taxes (1%): A house that is no longer occupied by a owner occupant will no longer qualify for the homestead exemption, so take into account a significant rise in property taxes, more if the property also no longer has an over-65 exemption.
Increased Insurance Premiums (1%): A non owner occupied house needs a different type of insurance policy that is more expensive than a traditional owner’s policy.
Repairs and Maintenance (10-15% of rent): Most rental property owners schedule at least 10% of annual rental income to go towards repairs, vacant utilities, and maintenance. But if you all of a sudden need a new roof, there goes another $20k. If you need a new HVAC system, that will be $15k. If you need a new water heater…….you get the point.
So if none of this sounds appealing to you and you want certainty, speed, and convenience in selling your inherited house, Fredo Buys Houses will help you determine the best price for any property near Saint Louis – if you sold it today without doing any work, on the day you choose, and on your terms.
If you don’t want to mess with money out of pocket, dealing with realtors, making repairs, updating kitchens, improving landscaping and overall cleanup, don’t worry. I buy Saint Louis houses for cash, as-is, on your timeline.