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Inherited Property: Should I Sell or Rent?

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Have you received properties as an inheritance and do not know what to do with the apartments you have inherited? At this point, you are caught between the crossroad of either selling or renting it out. Well, you are not alone.

In this part of the world, passing on inheritance has been an onus that from one generation to another, and in due course, it is only within sometime before someone gets overwhelmed with what to do with a premeditated, yet unseen future.  But then, you can’t just leave it to waste, else you’d be doing yourself and loved ones nothing but pain.  To avoid, that, we’ve put together 5 possible scenarios to help you understand how to make a decision.

The Scenarios

When it comes to inheriting a house, in addition to the purely economic problem, an emotional component comes into play, since we are emotionally and sentimentally tied to a house: we received property from our parents, or our grandparents, or some relative, and therefore certainly this aspect should not be underestimated.

This is an aspect that comes into play especially when we talk about houses: when we inherit money, the questions and doubts are hardly the same, since we are linked to a house by values, memories, and affections.

Therefore, the first fear that grips us when we find ourselves with an inherited property is that of making a wrong decision, perhaps going to undermine the respect of the person or people who have left us the inheritance.

So what to do?

We have created some ideal scenarios contextualized in medium-large cities, this is because we cannot know exactly where you live and it’ll be quite challenging to analyze it case by case: If you live in a small town, try to contextualize the information and see how it fits your plan.

First scenario: Short-term Rentals Through Specialized Agencies


If you were to find yourself in a tourist area or an area with a large traffic flow like Lagos and Port Harcourt, then you will know that short-term rentals are an option to consider.

Attention: when you operate on the short-term rental market, you are not directly managing your property, but a specialized agency does it for you in exchange for a commission on what are the proceeds.

For example, your property makes N1,000,000 euros a year in short-term rentals, the agency could withhold 20%, 30%, or 35% depending on the case.

You are left with the net rent (the one that comes in minus the money you owe to the agency, minus the annual management costs or bills, various utilities, and condominium or apartment-related expenses). Hence, it’s always important to find out what are the costs that the agency you have chosen would pay.

Second scenario: Traditional Rental Through an Agency

If you receive an apartment you may decide to rent it, either on a monthly, yearly, or with a student rental.

Also, there is an agency that takes care of skimming potential tenants and introduces you to the ones it deems most suitable for your apartment. You will have to agree on the rent to be requested with the agency.

In this case, the ordinary expenses and the various utilities are charged to the tenant, while the condominium expenses are to be divided between the tenant and the owner.

As an owner, therefore, you will collect the rent, and then reach an agreement whether the tenant pays for the utilities at once or in bits, whilst filling in for other things.

The real estate agency, on the other hand, takes a commission for each contract stipulated.

If you own an apartment in student-filled cities and in areas that are relatively close or convenient to the university, you could rent your accommodation to students instead; the rules change slightly.

The difference compared to short-term rentals is the fact that in this case there is a tenant who lives in the house for a medium-long period, so you don’t have people coming and going often.

A variable that you have to consider concerns the ‘ type of tenant ‘ you give your home to if you rent an apartment to a family with children, it may be “consumed” more than an apartment rented to a single person. Take this into account when it comes to the expenses or work you have to do in the apartment.


Third Scenario: Traditional or Short Rental Without Agency

You could think of renting your home without using the mediation of an agency, thinking about it for yourself. In this case, you will not turn to specialized subjects who deal with finding tenants or customers, but you will be the one to manage the whole situation, the practices, and the steps.

If the property is located in a tourist area, you could still evaluate short rentals and enter the property in the various portals for short rentals: you will take and upload the photos, caring for the check-in, cleaning, and therefore the overall management. Everything is your business your handle.

An advantage of this option is that aside from that you should have a little more leftover since even in traditional renting you won’t have to pay the agency commission, but you will find a suitable tenant for you.

Fourth Scenario: Inhabiting in Your Inheritance

This is a hypothesis that arises above all for those who live in rent and receive property as an inheritance. In this case, it is often decided to leave the rent and move into a house that has become owned, to save the money spent monthly on the rent.

If, on the other hand, you already live in your house and don’t need another one, you can apply the other tips of the guide.

Fifth Scenario: Sell, Sell and Sell

The solution is the clearest of all those presented. You receive property and sell it, to collect the money to invest in the stock market or to do what you want with it.

The reasons can be many: maybe you already have your own house, or you are not emotionally tied to the property or you simply don’t want to start managing it.

We can enclose the reasons in two specific reasons:

  • Logistical reason: it is difficult for you to move and worry about managing or controlling what happens to your property, or you simply don’t want to get involved in a management situation;
  • Financial reason: you want to sell to invest the money you earn on the financial markets, and you can get a higher return than what you would have from the property itself.


What should be done when inheriting a property?y


After having seen the possible scenarios, we come to the bureaucratic steps that must be taken to inherit a house and proceed with one of the choices mentioned above.

First of all, it is necessary to accept the inheritance (which, in the presence of a will, is made before the notary) and to submit, within one year of death, the declaration of succession to the lawyer in charge. Inheritance taxes must be paid on the spot if needed.

Immediately afterward, the purchase of the property must be transcribed in the real estate registers, which is done by the notary or in any case the person in charge of making the declaration of succession.

Both express and tacit acceptance can be recorded in the Real Estate Registers. If we are in the presence of a tacit acceptance, lacking a written document, we will ask for the transcription of the acceptance on the occasion of the deed that determines it, which can be a real estate sale drawn up by public deed or by authenticated private deed.

Finally, for the last step, it is necessary to carry out the transfer at the land registry.

What next?


Simple!!! It’s time to guide you into more clarity by giving you some further ideas on how to analyze the possible doubts that could torment you: first of all you have to understand whether to manage the rent of your apartment or manage it yourself.

To understand this, you need to evaluate whether your time spent running your business is worth the money you have to pay to the agency.

You have decided to rent …

It must be said that with short rentals, for example, you earn more, as there is a greater turnover, but it is also true that the speed with which tenants come and go means more work for you.

In short, to start skimming the possibilities you must first make an estimate, a sort of business plan to understand what you would earn by managing everything firsthand, or what you would earn if you were delegated to a specialized agency. Attention, you have to calculate the gain in terms of money, but also of time!

The agency indeed asks for money to run the business, but it is assumed that it knows how to do it well, so that it takes care of putting the property at the right price, deciding which are the best portals, etc. you should just inform yourself and maybe take months to understand all the dynamics.

We estimate that in a reasonable period you will be able to obtain the same results as the agency, what is the comparison benchmark you need to have?

Consider the greatest value you can get: for example, let’s say you should earn N100,000 net from the apartment.

If you rent it through the agency, it would hold N30,000 then with the agency you would earn 70,000 nairas.

If you did it yourself, 30,000 nairas would be the cost of your time, so you have to scale the costs. This would be your remuneration.

So if you were to rent it yourself you would have a double income:

  • Income of a patrimonial nature, which derives from your real estate asset that you would have received even if it had been the agency to manage;
  • Income from your work, which is the time you spend on managing your property.

You have to ask yourself how many hours you have to work to get that income, or you have to ask yourself if you would be able to obtain a higher remuneration by doing it alone than by managing with an agency.

You don’t have to consider the business as asset management, but you have to consider it as a business activity and therefore you have to compare it with other business activities. Here you will find a truly complete guide on real estate investments. Many people erroneously think of brick as an investment, but this is not the case. It is a real job. If you want to clarify your investment ideas, read through that article.

You have decided to sell…

Another dilemma could be: do I keep the real estate rent or do I invest in the stock market?

First, we assume that the apartment is saleable and that we are in a historical phase in which you can easily sell and make money.

In this case, therefore, the benchmark is: you’ve invested your money in the stock market.

How is the comparison made?

Think about how much you could collect from the rent (by track record or by making an estimate). If you already invest in the stock market you may also have the other value to make the comparison and have your data, but if you have no experience in the stock market, then you need some time to acquire skills for managing the capital you want to invest.

In this last case (i.e. you sell and you have no experience) to evaluate your earnings, you must consider not only the return on the investment but also the time and money spent on training to act consciously (you don’t want to throw yourself into Bag without knowing what it is?).

All this must be considered when trying to understand if it is convenient to keep the property to rent it or if it is better to sell and invest in the stock market.

Consider that by investing in the long term, you can expect 4% per year, at most 7% per year on average.

Let’s take a practical example: by selling, hypothetically, you could get 10,000,000 nairas. By investing them you could (based on what has just been saying) earn from 4% to 7% per annum: compare this income with what you expect to earn from the rent.

Also consider that renting is more rigid than an investment, since investing in financial markets involves the allocation of assets across multiple financial instruments, across multiple investment classes, across multiple countries, across multiple sectors, and also involves owning of liquidity because you can buy and sell with a click (which is less immediate with a house).

Investment in the stock market is, therefore, freer and more liquid than real estate, which is more static.


Based on what we have seen, summarizing, in deciding on what to do with your real estate inheritance you will have to evaluate personal aspects, economic aspects, and financial aspects.

As a personal situation, you now have all the tools to be able to make assessments and choose the path that suits you!

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