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What are your options when you inherit a home?

Your great aunt died, and you learn that because you were always her favorite, she left you her home. That may sound like an unexpected bit of good fortune amid the grief of losing a loved one. However, home ownership isn't all it's cracked up to be -- particularly if the house is old, in disrepair and/or simply not where you want to live.

Before you decide what to do, take a look at the property, particularly if you haven't seen it in some time. It may no longer be the anything like your childhood memories of it. Then, you need to consider your options.

Make the home your own

If the home is where you want to live, that's great. Even if it's paid off, though, remember that you still need to pay property taxes and the other costs that go with home ownership. You may also owe an inheritance tax.

Keep the home and rent it

An inherited home can be a nice source of rental income if you don't mind being a landlord or paying a management company to handle the job. If property values are rising, keeping it may be a good investment.

Sell the property

There are a couple of options if you decide to sell the it. Many people have an estate sale that includes the home, furniture and other belongings they don't want. This is often the simplest way to handle inherited properties.

You may decide to fix it up so you can get a higher price. It's a matter of whether the money and time you spend on repairs and renovations is worth the amount you can get by bumping up the sale price.

Refuse the inheritance

Take a look at what the house is actually worth. If the remaining mortgage is more than the property value, you may not want to deal with it. You are allowed to "disclaim" an inheritance. However, if that's your decision, notify the executor as soon as possible.

If you've inherited a property, whether alone or with others (which can have its own complications), it's wise to seek legal guidance from an experienced estate planning attorney as well as from real estate, financial and tax professionals to ensure that you're making the best decision for your future.

Source: Realtor.com, "So You Inherited Property—Now What?," Lisa Johnson Mandell, accessed Oct. 06, 2017

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