Inheriting a home is a complex experience, blending the feelings of loss when a loved one dies with the practicalities of managing a newly acquired property.

While selling might seem like the straightforward choice, there could be more value in creating a rental investment for a steady income stream and preserving a family asset to pass down in your own will.

Getting to that point means making informed choices and navigating lettings law, so our guide to renting out an inherited property explores the key steps to take, including:

The benefits of renting out an inherited home
Legal and financial considerations
Creating a high-income, low-hassle rental
Targeting and referencing great tenants
Effective management and maintenance

By the time we're through, you'll have enough insights and knowledge to decide if turning an inherited home into a rental investment is the right choice for you, whether you're a seasoned landlord or just starting out.

THE BENEFITS OF RENTING OUT AN INHERITED HOME

During the process of being granted probate, you’ll have time to consider what inheriting a property could mean for you. And when it comes to keeping it as a rental investment, some of the unique advantages include:

Avoiding the stamp duty and extra second-home supplement that come with buying a rental home, saving you thousands in upfront costs. You'll also avoid sales commission by not selling.
There’s no house-hunting involved, which means you can start earning rental income sooner without needing to find a property, negotiate a price, or deal with the lengthy legal process.
Renting out a previous family home preserves cherished memories and retains the sentimental connection and ownership of a property that means a lot to you.

Finally, by keeping the property as an income-producing asset, you can release the equity for other projects and adventures like home improvements, further investments, dream trips, or lifestyle luxuries.

LEGAL & FINANCIAL CONSIDERATIONS

Inheriting a property and renting it out comes with a few legal and financial considerations to get everything in order by the time you hand over the keys to a tenant, and the checklist includes:

Confirming the probate has been granted so that you're legally entitled to rent the property out, then registering your ownership with the Land Registry.
Speaking to an accountant about inheritance tax now, income tax from the rental income, and future Capital Gains Tax if you sell the property after renting it out.
Informing any lenders of the bereavement if the property has a mortgage or loan secured on it, then either transferring the debt to you or exploring other lenders (and getting consent to let).
Updating the property insurance to a landlord policy that covers rental use, public liability, potential damage, and rent protection. Read more on that here.
Arranging an Energy Performance Certificate (EPC), gas safety check, and electrical safety inspection, then installing smoke and carbon monoxide alarms where legally required.

You can find lots more info on tax liabilities and allowable expenses in our Landlord Tax Tips blog, so boost your knowledge to gain more confidence now and avoid costly mistakes later.

CREATING A HIGH-INCOME, LOW-HASSLE INVESTMENT

An inherited home may need some work to turn it into an appealing, safe, and modern property for tenants, and to give you the highest return. So here are some pointers to get the best result.

Explore whether the property would be better off rented as a single home on its current arrangement, or if it could be divided into multiple smaller homes for a greater profit.
If it’s a large house and suitable as an HMO, there are licenses to apply for and extra fire safety measures to put in place to meet individual local authority policies and national legislation.
Fix any obvious issues inside like damp, leaks, damage and broken fixtures, then check outside for blocked gutters, slipped roofing, cracked brickwork or render, and rotting woodwork.
Think about energy efficiency. Install an effective heating system, add flow restrictors to taps and loos, and plug draughts around windows, doors, letterboxes and keyholes.
Invest in a modern kitchen and bathroom. Include premium appliances from brands like Bosch and AEG, a high-quality thermostatic shower with good water pressure.
Decorate in warm, neutral tones to get great photos and give potential tenants a crisp, cosy and stylish viewing experience. Fresh paint, clean floor coverings, and tidy gardens work wonders.

In summary, a high-quality home with high-end marketing will always find and keep the highest-quality tenants at the highest possible rent. There's no better route to uninterrupted and hassle-free income.

TARGETING AND REFERENCING GREAT TENANTS

Once your property is ready for the rental market, it’s time to tell the world. Finding conscientious and reliable tenants is key to a successful tenancy, and here’s how to get it right:

Compare similar local properties to set an appropriate rent. Asking too much usually kills off interest, but precision pricing creates excitement that can push your rent to a higher level.
Make sure your photos, description and online presence accurately and thoroughly reflect all the benefits of your property to generate the best enquiries.
Vet potential tenants with full credit checks, references from landlords and employers, and six months of bank statements to see how they manage their money.

As a final point, you'll also need to confirm each tenant's Right to Rent if your property is in England (but not if it's in Scotland or Wales) and you’ll find even more info in our Rigorous Referencing blog .

EFFECTIVE MANAGEMENT AND MAINTENANCE

As soon as you’ve got a tenant in place, it's essential to stay on the case around management and maintenance to protect your investment and ensure a positive rental experience for everyone.

Whether you're minded to self-manage or use a letting agent to handle everything for you, a knowledgeable, organised and hands-on approach is the way to avoid legal pitfalls and financial penalties.

Before your tenant moves in, supply them with copies of valid energy performance and safety certificates, the How to Rent guide, and the deposit protection certificate.
Make regular inspections to foster a good relationship with your tenant and spot any behavioural or maintenance issues before they become major problems. More on those here.
Build a circle of trusted contractors, schedule annual safety checkups as recurring events in your calendar, respond to your tenants whenever they report a problem, and keep them informed of progress and delays.

We don't have an example where skimping on repairs or ignoring tenants has ultimately saved a landlord time, money, or hassle, so always care for your rental property as if it were your own home. You’re unlikely to ever regret it.

Have you recently inherited a home?

While it takes planning, knowledge, and a bit of elbow grease to turn an inherited property into a successful investment, you don’t have to do it alone.

We manage rental homes in the Wilton & Salisbury area for experienced, novice, and even accidental landlords, and we'd love to help you, too. So call us on 01722 580059 or email us at info@piccoloproperty.co.uk for a no-strings chat about your property and your next best step.