By Natalie Novarro, REALTOR®
Sotheby’s International Realty – Beverly Hills
Serving the Hollywood Hills • Sunset Strip • Surrounding Los Angeles Neighborhoods
You’ve inherited a home in Los Angeles.
Now what?
Maybe it was your parents’ longtime home. Maybe several family members inherited it together. Maybe the property is vacant, needs work, or is still filled with decades of belongings.
And now you’re faced with a major decision:
Should you sell the property, keep it, rent it out, or even move into it yourself?
There isn’t one answer that’s right for everyone.
Before making the decision, I’d separate the emotional, financial, legal and real estate questions—and then look at what the property is actually worth and what keeping it would realistically involve.
Here are some of the things I would consider.
1. Start by Understanding What You Actually Inherited
Before deciding what to do with the house, make sure you understand the ownership situation.
Was the property held in a trust?
Is it going through probate?
Are you the only beneficiary, or did several people inherit the property?
Is there a mortgage?
Is someone currently living in the home?
Who has the legal authority to make decisions regarding the property?
These aren’t questions I would try to answer as your real estate agent.
Depending on the situation, an estate or trust attorney, CPA, tax professional or other appropriate adviser may need to be involved.
But from the real estate side, once we understand who can make decisions about the property, we can start evaluating the options.
2. Find Out What the Home Is Worth Today
This is one of the first things I would do.
Don’t assume the home’s value based on an old appraisal, tax assessment, online estimate, or what a nearby property sold for several years ago.
You want to understand what buyers would likely pay for the property in today’s market and in its current condition.
That can be especially important in areas like the Hollywood Hills.
Two homes with similar square footage can have very different values depending on:
- Views
- Architecture
- Privacy
- Street location
- Access
- Parking
- Lot usability
- Condition
- Natural light
- Outdoor space
- Renovations
- Development potential
Before deciding whether to keep or sell an inherited property, I’d want a realistic picture of its current market value.
3. Should You Sell the Home?
Selling may make sense if you don’t want the responsibility or expense of owning another property.
Maybe you live outside Los Angeles.
Maybe several family members inherited the home and would prefer to divide the proceeds.
Maybe the property needs substantial work.
Maybe there is an existing mortgage, insurance, property taxes, maintenance, landscaping and other carrying costs.
Or perhaps you simply don’t want to become a landlord.
Selling can turn an illiquid asset into proceeds that can be distributed or used elsewhere.
But before deciding to sell, I’d want to understand what the property could realistically sell for and whether doing anything to it beforehand could improve the result.
4. Should You Keep the Home?
Keeping an inherited home can also make sense.
Perhaps you love the property.
Maybe it has significant sentimental value.
Maybe you want to live there.
Or perhaps you believe holding Los Angeles real estate makes sense for your long-term financial plans.
But I’d separate wanting to keep the house from wanting to own the house.
Owning it means taking responsibility for the ongoing expenses.
That may include:
- Property taxes
- Insurance
- Mortgage payments, if applicable
- Repairs
- Landscaping
- Utilities
- Maintenance
- HOA dues, if applicable
- Property management if it becomes a rental
Before keeping the property, I’d want to understand what it will actually cost to own.
5. What About Renting It Out?
This is often the middle option.
You don’t sell the property, but you don’t move into it either.
Instead, you turn it into a rental.
That can sound attractive, particularly if the home has no mortgage or a relatively low payment.
But I’d run the numbers before assuming renting is automatically the better financial choice.
What could the property realistically rent for?
What will your monthly and annual expenses be?
Will you manage it yourself or hire a property manager?
Does it need work before it can be rented?
What happens when something breaks?
Are there applicable local or state rental rules that affect the property?
And perhaps most importantly:
Do you actually want to be a landlord?
Rental income can be attractive.
So can selling the property and putting the proceeds toward something else.
Those are two different financial decisions, and they should be compared realistically.
6. Be Careful With the Property-Tax Assumption
This is one area where I’d tell you to speak with an appropriate tax professional and the county assessor rather than relying on what someone tells you casually.
California’s Proposition 19 changed the rules surrounding certain transfers of property between parents and children.
Depending on the circumstances, an inherited property may be reassessed for property-tax purposes.
There are exclusions available in certain situations, including qualifying transfers of a family home when specific requirements are met.
So if part of your decision to keep an inherited home is based on the assumption that you’ll simply keep the previous owner’s property-tax basis, verify that assumption before making the decision.
Property taxes can materially change the economics of keeping a home.
7. Do You Need to Renovate Before Selling?
Not necessarily.
This is one of the biggest questions I hear around inherited properties.
Sometimes the home hasn’t been updated in 20, 30 or even 40 years.
The kitchen is dated.
The bathrooms are original.
The carpet needs to go.
The landscaping is overgrown.
And suddenly everyone starts talking about a $200,000 renovation.
I wouldn’t automatically do that.
Before spending significant money, I’d want to know:
Who is the likely buyer for this property?
If the home is likely to attract someone who plans a major renovation anyway, spending heavily on cosmetic improvements may not make sense.
On another property, paint, landscaping, lighting, cleaning, staging and relatively minor improvements might substantially improve how buyers perceive it.
The goal isn’t to make the home perfect.
The goal is to determine which improvements, if any, are likely to improve the sale enough to justify their cost.
Related: Should I Fix Up My Los Angeles Home Before Selling It?
8. Selling As-Is May Be the Right Strategy
Sometimes convenience matters more than maximizing every possible dollar.
If the home needs substantial work and the family doesn’t want to spend months renovating it, an as-is sale may deserve consideration.
But “as-is” doesn’t have to mean:
Do nothing and put a sign in the yard.
You can still clean the property.
Remove unnecessary belongings.
Improve landscaping.
Present it well.
Use professional photography.
Market its potential.
And position it appropriately for the buyer most likely to purchase it.
An as-is home can still be marketed strategically.
Related: Should I Sell My Los Angeles Home As-Is or Fix It Up First?
9. What If the Home Is Full of Belongings?
This can be one of the hardest parts of dealing with an inherited home.
You’re not simply preparing a property for sale.
You may be sorting through a lifetime of someone’s belongings.
Don’t feel like you need to make every decision at once.
First determine what family members want to keep.
Then consider what should be donated, sold, stored or removed.
Depending on the situation, an estate-sale company, organizer, mover or clean-out service may be helpful.
From the real estate side, I can help you determine how empty the home actually needs to be before we start preparing it for market.
Sometimes everything needs to go.
Sometimes it doesn’t.
10. What If Several Family Members Inherited the Property?
This can make the decision more complicated.
One person may want to sell.
Another may want to rent it.
Someone else may have an emotional attachment to the home.
And another family member may simply want the process finished.
Before spending money preparing the property, I’d want everyone involved to understand the options and agree on the overall direction.
You may also need legal guidance regarding who has authority to make decisions or sign documents on behalf of the estate or trust.
From the real estate side, I can provide the information that helps everyone evaluate the property:
What might it sell for?
What condition is it in?
What would I recommend doing before selling?
What are comparable properties doing?
Who is the likely buyer?
Sometimes having actual market information makes the family conversation much easier.
11. Don’t Forget About Timing
You don’t necessarily have to make the decision immediately.
But keeping a vacant property has costs and risks.
Insurance, utilities, landscaping, maintenance, security and property taxes don’t stop simply because nobody is living there.
At the same time, rushing a home onto the market before understanding its condition, ownership situation and value may not be the best decision either.
I’d establish a timeline.
What needs to happen legally?
What needs to happen with the contents?
Does the property need any work?
When would you ideally like it sold?
Once we know that, we can work backward and create a realistic plan.
12. Don’t Make the Decision Based Only on Sentiment—or Only on Money
Inherited homes can be emotional.
It may be the house where you grew up.
It may contain decades of family memories.
That matters.
But I also think it’s useful to separate the emotional decision from the financial one.
Ask yourself:
If I hadn’t inherited this particular house, would I choose to buy it today as an investment?
That’s an interesting way to look at the decision.
If the answer is yes, keeping it may deserve serious consideration.
If the answer is no, ask yourself why you’re holding onto it.
There’s nothing wrong with keeping a property because it means something to you.
Just make sure you’re making that choice intentionally.
13. Before You Decide, Compare the Options Side by Side
If I were helping someone evaluate an inherited Los Angeles home, I would want to understand three scenarios:
Sell it now.
What might the property sell for in its current condition?
Prepare it and sell it.
What improvements would I recommend, what might they cost, and how could they affect the property’s marketability?
Keep it.
What would it realistically cost to own, and if you’re considering renting it, what might the property generate?
Your attorney, CPA or financial adviser may need to help evaluate the legal and financial implications of those options.
My role is to help you understand the real estate side of the equation.
Once you have that information, the decision often becomes much clearer.
Related: How Do I Choose a Real Estate Agent to Sell My Los Angeles Home?https://natalienovarrohomes.com/choose-real-estate-agent-sell-los-angeles-home/
Frequently Asked Questions
Should I sell an inherited house as-is?
It depends on the property. If the home needs extensive renovation, selling as-is may make sense. But relatively inexpensive improvements such as cleaning, painting, landscaping or staging may sometimes improve the property’s presentation and marketability. I would evaluate the home before spending significant money.
How do I find out what an inherited home is worth?
A real estate agent can evaluate recent comparable sales, current competition, the home’s condition, location and unique features to estimate its likely market value. In areas such as the Hollywood Hills, property-specific factors like views, architecture, privacy, access and lot usability can significantly affect value.
Should I rent an inherited house instead of selling it?
Possibly. Compare realistic rental income with property taxes, insurance, maintenance, repairs, management expenses, mortgage payments and other ownership costs. You should also consider whether you actually want the responsibilities of being a landlord.
Do I have to go through probate before selling an inherited home?
Not every inherited property follows the same process. How the property was titled, whether it was held in a trust and other estate circumstances can determine what process applies and who has authority to sell it. An estate or probate attorney can advise you about your particular situation.
Will my property taxes increase if I inherit my parents’ California home?
They may. California’s Proposition 19 changed the property-tax rules for certain intergenerational transfers. Some qualifying family-home transfers may receive an exclusion from reassessment when specific requirements are met, including principal-residence requirements. Consult the county assessor and an appropriate tax or legal professional regarding your circumstances.
What if my siblings and I disagree about whether to sell?
This can become both a family and legal issue. Before taking action, determine who has authority over the property and get appropriate legal advice if necessary. A current property valuation and realistic estimates for selling, improving or renting the home can also give everyone concrete information to consider.
Should I renovate an inherited home before selling it?
Not automatically. I’d first evaluate the property’s current value, likely buyer and condition. Sometimes strategic improvements make sense. Other times the likely buyer would prefer to renovate the property themselves.
I Inherited a Home in Los Angeles. What Should I Do First?
If you’ve inherited a home in Los Angeles and you’re trying to decide whether to sell it, keep it or rent it, you don’t have to make the real estate decision before you understand your options.
I can help you evaluate the property from a real estate perspective:
What might it be worth today?
What would I recommend doing before selling it?
Would I sell it as-is or prepare it first?
Who is the likely buyer?
And how would I position the property if you decide to put it on the market?
I specialize in luxury and architectural homes throughout Los Angeles, with a focus on the Hollywood Hills and Sunset Strip.
If you’d like me to take a look at an inherited property and give you my assessment, visit the Contact page or call/text 323-719-3360.
I’m always here to help.
About the Author
Natalie Novarro is a real estate agent with Sotheby’s International Realty in Los Angeles, specializing in the Hollywood Hills and Sunset Strip.
With over 20 years of experience and more than $100M in career sales, she works with buyers, sellers, and investors throughout Los Angeles.
For more information or to get in touch, visit the Contact page or call/text 323-719-3360.
Disclaimer: This article is for general informational purposes only and is not legal, tax, probate or financial advice. Inherited-property ownership, taxes, probate, trusts and the authority to sell depend on the specific circumstances. Consult the appropriate legal, tax and financial professionals regarding your situation.