Inheriting money and dealing with not having parents around at the age of 30 can be a daunting experience.
Since I have siblings, the money left behind by our parents were split into portions accordingly. Thankfully, they had a will, which made things a lot easier (will blog about the importance of wills and probate costs).
When I had the money deposited into my bank account, I was VERY tempted to just go out to buy a nice second hand sports car (I was seriously thinking about that!). Instead of buying a big ticket item, I did go for a bit of a spending spree.
I ended up inheriting:
1/3 interest in my parent’s house;
$32,000.00 in cash (I originally had $77,000.00 in cash, but I had to pay off the mortgage on my parents house, the yearly utility fees, house insurance and property tax for the house, and legal and probate fees); another’ and
15,000.00 sitting in the Estate account which will be distributed once we receive a Clearance Certificate from the CRA.
What I did with the CASH:
Since I had no plans for the money and I have not maximized my TFSA:
I put $15,000.00 into the TFSA High Interest Savings Account at Tangerine; and
I invested $10,000 into TD Bank’s TFSA Mutual Funds.
The money grew about 1.3% sitting in Tangerine’s TFSA High Interest Account, while the Mutual Funds sitting in my TD Bank grew 10% since January 2014.
What I did with the HOUSE:
We still have not transferred the title of the house yet. We have been advised by many people to sell the house as quickly as possible so that we don’t have to pay capital gains.
Our parents were pack rats, so it will take us at least 6 months to clean it out with things going into storage. Since we were finishing up a project that was started by our dad, we did not have any time whatsoever to start decluttering or to clean out the house. It is currently a money pit for us (house insurance, property tax, utility fees, and etc.). Trust me, I really want to get someone to at least house sit for us to lower the house insurance cost, but there is just too much “stuff” in there!
Though we still have to clear the house out, we have decided to turn the house into a rental property. I am hoping that by January 2015, the house would be cleared and we could start renovating it to change it into a two unit rental property (upper and lower). I will talk about how we came to decide to keep the house in a later post.
In the meantime, what would you do if you inherit an old-timer house from your parents? Will you sell it as is, renovate it and sell it, or knock it down, build a nice house and sell it to make a higher profit?
~The Money Pincher ~