Renting out an inherited house? Here’s how to do it

Have you recently inherited a house and are considering renting it out? This is a great way to generate extra income while maintaining the value of the property. In this article, we will discuss all aspects of renting out an inherited house, including legal and tax implications, preparing the house for rental, and finding the right tenants. Read on to discover how to successfully navigate this process.

The benefits of renting out an inherited house

Renting out an inherited house offers several benefits. First, it can generate extra income. This can be especially advantageous if you already have your own home or if you do not wish to live in the inherited house yourself. Renting out the house can become a stable and long-term source of income.

Another benefit is that renting out the inherited house can help maintain its value. By ensuring the house is occupied, you prevent potential depreciation. This is especially important if you plan to keep the house long-term and possibly sell it at a later time.

Renting out an inherited house also allows you to generate passive income. This means you earn money without actively working for it. By renting out the house, you can receive monthly rental income without investing additional time and effort.

Moreover, renting out an inherited house can also bring tax advantages. In some cases, you can deduct certain costs, such as maintenance expenses and taxes, from the rental income. This can lead to significant tax savings and a higher net income.

Finally, renting out an inherited house can also be a form of social engagement. By offering the house for rent, you provide housing opportunities to people. This can be particularly valuable in areas with high demand for rental properties and limited supply, such as the Randstad.

Legal aspects of renting out an inherited house

Before renting out an inherited house, it is crucial to understand the legal aspects. One of the first things you need to understand is the rental law. This includes matters such as tenant protection, notice periods, and the rights and obligations of both tenant and landlord.

Another important step is drafting a rental agreement. This document outlines all the arrangements between you and the tenant, including the rent, the duration of the agreement, and any additional conditions. Having a well-drafted rental agreement is essential to prevent potential disputes in the future.

Besides rental law and drafting a rental agreement, there are other legal aspects to consider when renting out an inherited house. One important point is insurance. It is wise to check if the current insurance covers renting out the property. In some cases, it may be necessary to take out special landlord insurance.

Additionally, it is important to know that as a landlord, you are responsible for the maintenance of the inherited house. This means you must carry out any repairs and maintenance work. It is advisable to regularly inspect the house and address any problems as soon as possible.

Another aspect to consider is taxes. If you rent out an inherited house, you may need to pay taxes on the rental income. It is wise to seek advice from a tax advisor to ensure you meet all tax obligations.

Finally, it is important to mention that renting out an inherited house can also bring emotional aspects. Renting out the house of a deceased loved one can be difficult, especially if there are many memories attached to it. It is important to discuss this with family members and possibly seek professional help to cope with it.

Tax implications of renting out an inherited house

Renting out an inherited house has tax implications to consider. First, there is the income tax you must pay on the rental income. It is important to know what tax benefits and deductions are available for landlords so you do not pay more tax than necessary.

Additionally, inheritance tax is an important aspect. Renting out the inherited house can affect the amount of inheritance tax you have to pay. It is advisable to seek advice from a tax advisor to understand how renting out the house can affect your tax obligations.

Besides income tax and inheritance tax, there are other taxes to consider when renting out an inherited house. For example, the municipality where the house is located may levy property taxes (OZB). This tax is based on the value of the house and can vary by municipality.

Another important aspect to consider is VAT. If you rent out the inherited house as a professional landlord, you may have to pay VAT on the rental income. This depends on the specific situation and the type of rental you offer.

It is also good to know that as a landlord, you are entitled to certain deductions. For example, you can deduct the costs of maintaining the house, such as painting or repairs, from your taxes. The costs for managing the house, such as administrative fees and real estate agent fees, can also be deducted in some cases.

Preparing the house for rental

Before you can rent out the inherited house, you need to ensure it is ready for occupancy. This includes maintenance and repairs. Walk through the house and identify any defects that need to be repaired before receiving tenants, such as leaking faucets, broken windows, or damaged floors.

Additionally, it is important to furnish the house attractively and functionally for potential tenants. Ensure a fresh coat of paint, neat floors, and that all essential amenities are in good condition. A well-maintained and attractive house will have a better chance of attracting tenants.

When preparing the house for rental, it is also important to think about the safety of the tenants. Check that all smoke detectors and carbon monoxide detectors are working properly and replace the batteries if necessary. Ensure all electrical wiring and outlets are in good condition and have them inspected by a certified electrician. Additionally, it is advisable to place a fire extinguisher and a first aid kit in the house so tenants can act quickly in case of emergency.

Besides ensuring basic safety, it is also important to ensure the privacy of tenants. Make sure all windows have curtains or blinds so tenants can feel comfortable in their new home. Additionally, it is recommended to spruce up the garden or terrace so tenants can enjoy an outdoor space to relax and socialize.

To make the house more attractive to potential tenants, you can consider adding some extra amenities. Think, for example, of a washing machine and dryer, a dishwasher, or an air conditioning system. These extras can convince tenants to choose your house over another.

When the house is ready for rental, it is time to attract potential tenants. Koops Real Estate Haarlem can help you with this. We ensure your property is visible on all major platforms. We screen tenants and ensure the best possible match is found.

Finding the right tenants

One of the most important aspects of renting out an inherited house is finding the right tenants. It is essential to screen potential tenants to ensure they are reliable and able to pay the rent on time. You can do this by checking references, conducting background checks, and possibly requesting a tenant declaration. When you choose to hire us to handle the entire process, we will perform all the above tasks. We also provide a rental agreement, a check-in with a detailed report on the condition of the property, and check the tenants out when they terminate the rental.

All in all, renting out an inherited house can be a lucrative and valuable investment. By following the right steps and being aware of the legal and tax aspects, you can successfully navigate this process. Do not forget to properly prepare the house for rental and hire a real estate agent who can help with all matters related to renting out a property. Schedule a free appointment with one of our agents, who can tell you everything about how we can assist you.