First and foremost, we extend our deepest sympathies for your loss. Navigating the legal, financial, and emotional complexities that arise after the passing of a loved one is incredibly difficult. When the inheritance includes a home in the dynamic Orlando, Florida, real estate market, you are faced with a significant decision: “I inherited a house in Orlando, what is the most sensible thing to do with this asset?”
Choosing between renting the property for passive income and selling it for immediate capital requires careful, unbiased analysis. Our goal, based on years of specific experience with inherited properties in the Central Florida region, is to provide you with the comprehensive, actionable information you need to make an informed choice that aligns with your financial goals and personal capacity.
Part I: The Immediate Steps – What To Do Right Now
Before you can decide to rent or sell, several critical administrative and legal steps must be addressed. Neglecting these can lead to significant financial loss or legal complications.
1. Secure the Property and Preserve the Asset
The moment the property is legally yours (or the estate’s), your responsibility for its safety begins.
- Change Locks and Codes: Immediately replace the exterior door locks and update any security system codes. This protects the asset from previous tenants, acquaintances, or theft.
- Update Insurance Coverage: Your existing homeowner’s policy may no longer be valid, especially if the house is vacant. Contact the insurance agent and switch to a Vacant Dwelling Policy. Standard policies often exclude coverage if a home is unoccupied for 30–60 days, which is common during probate. This protection is non-negotiable in hurricane-prone Florida.
- Check Utilities: Ensure utilities (electricity, water, gas) are transferred to your name and kept on. Minimal heat/AC is often necessary to prevent mold and water damage—two major concerns in Florida’s humid climate.
2. Determine the Legal and Financial Status of the House (The Mortgage Check)
This is the most critical financial step.
Understanding the Mortgage and the Garn-St. Germain Act
If the deceased had a mortgage, the lender generally cannot immediately demand full repayment solely because of the transfer of ownership due to death. This protection is provided by the federal Garn-St. Germain Depository Institutions Act.
- Assuming the Loan: If the original loan had a low interest rate, you might want to keep it. The Act generally allows qualified relatives who inherit the property to assume the existing loan without triggering the “Due-on-Sale” clause. You must promptly contact the lender to discuss this option.
- Refinancing: If you plan to rent the home, some lenders may require you to refinance into a new loan under your name. Your ability to qualify for a new loan will directly impact your ability to keep the property as a rental.
- No Mortgage: If the home is owned free and clear, congratulations! Your options are far simpler and more profitable.
3. Navigate the Florida Probate and Title Transfer Process
In Florida, the transfer of an inherited house is usually handled through the Probate Court unless the property was held in a Living Trust, had a Lady Bird Deed, or was held as Joint Tenants with Right of Survivorship.
- Probate Takes Time: Be prepared for probate to take several months, or even longer if there are disputes. You generally cannot sell or rent the property until the court legally authorizes the transfer to the new owner(s) (the beneficiaries).
- Get Legal Counsel: Hire a Florida-based Probate Attorney immediately. This ensures the title transfer is handled correctly and legally, protecting you from future claims.
- Identify All Owners: If the property was inherited by multiple siblings or heirs, all must agree on the final course of action (rent or sell). Lack of consensus is a primary reason inherited homes stall in the market.
Part II: Financial Deep Dive – The Decision to Rent vs. Sell
Once the legal groundwork is laid, you must conduct a thorough financial comparison.
4. Property Ownership Costs (The “Rent” Side of the Ledger)
Before seeing any profit from renting, you must account for the fixed and variable costs associated with owning real estate in Orlando:
| Cost Type | Description | Estimated Annual Impact |
| Fixed Costs | Property Taxes, Homeowners Insurance (Higher for rentals) | High |
| HOA Fees | Mandatory fees in many Orlando communities (e.g., Lake Nona). | Varies, can be significant |
| Management Fees | Professional property manager (8-12% of gross monthly rent) | Substantial |
| Maintenance Reserve | Emergency repairs (AC, water heater, roof) & Turnover prep | Budget $150-$250 per month (or 1.5 months of rent per year) |
| Vacancy Rate | Time between tenants where you collect no rent (Florida average: 5-8%) | Loss of 0.5 to 1 month of income per year |
The Investment Is Only as Good as the Manager
If you choose to rent, you are signing up to be a landlord. This involves marketing, screening tenants, legal compliance (e.g., security deposit laws), and handling maintenance calls. If your time is better spent elsewhere, you must factor in the cost of a professional property manager.
5. Selling Costs and Proceeds (The “Sell” Side of the Ledger)
If you sell, your net proceeds will be impacted by how you choose to sell:
Option A: Traditional Sale (Retail Market)
This aims for the absolute highest price but requires the greatest investment of time, money, and effort.
- Repair/Renovation Costs: You must be willing to spend tens of thousands of dollars to compete with modern, updated homes. Orlando retail buyers expect updated kitchens, new flooring, and a perfect appearance.
- Expert Tip: Get a detailed home inspection ($400-$600) before listing to identify major defects a buyer will use to negotiate down the price.
- Realtor Commissions: Typically 5-6% of the final sale price.
- Closing Costs & Concessions: Includes title fees, transfer taxes, and often 1-3% of the sale price given as concessions to the buyer for their closing costs.
Option B: Cash Sale (As-Is Investor Buyer)
This option offers speed, convenience, and certainty, though often at a slight discount compared to a fully renovated retail sale.
- Zero Repair Costs: You sell the home exactly as it is—no cleaning, no repairs, no staging. We handle it all.
- No Commissions: When you sell directly to an investor, you skip the realtor commissions entirely, saving you 5-6%.
- Faster Closing: Cash transactions avoid lender financing delays, allowing you to close in as little as 7–14 days, providing immediate liquidity.
6. The Tax Factor: Stepped-Up Basis Analysis
This is arguably the most important element for an inherited property. Do not skip consultation with a CPA.
- The Stepped-Up Basis: Inherited assets receive a new tax basis equal to their fair market value (FMV) on the date of the decedent’s death.
- Example: If the relative bought the house for $100,000 and it was valued at $350,000 when they passed away, your new cost basis is $350,000.
- Implication: If you sell the house soon after for $360,000, you only pay capital gains tax on the $10,000 profit, not the $260,000 appreciation over time.
- Selling Quickly is Tax-Advantaged: Because of the stepped-up basis, selling an inherited home relatively soon after the death often results in little-to-no capital gains tax liability. The longer you wait, the more taxable appreciation you accrue.
Part III: The Experience & Expertise Factor – Making the Final Decision
7. Analyze the Orlando Market and Neighborhood Trends
Real estate is hyper-local. A rental strategy that works in a tourist-heavy area like Kissimmee may fail in a family-oriented suburb like Winter Garden.
- Long-Term Appreciation: Is the neighborhood on a significant upward trajectory? If appreciation (growth in value) is strong, holding the property as a rental might be a better long-term wealth builder.
- Rental Demand: What is the average rental rate and vacancy rate for similar properties in your specific zip code? Use tools like Zillow Rental Manager or consult with a local property manager.
- The Tourism Factor (Orlando): Do you want to try short-term rentals (Airbnb)? This is potentially more lucrative but involves far more work, licensing, and compliance with local ordinances that heavily restrict short-term rentals in many areas of Orange County.
8. Your Personal Capacity and Financial Goals
Your decision shouldn’t be based purely on dollar signs. Your time, temperament, and immediate financial needs matter.
| Goal/Need | Suggests Renting | Suggests Selling |
| Need for Liquidity | No | Yes (Especially with a cash buyer) |
| Risk Tolerance | High (Repairs, tenants, vacancy are all risks) | Low (A lump sum is certain) |
| Willingness to Manage | High (Time for vetting, maintenance, admin) | Low (Hand-off the problem immediately) |
| Long-Term Wealth Strategy | Real Estate Investment and Appreciation | Diversify funds into stocks, retirement, or other assets |
9. Compare the Scenarios: A Final Table of Options
Use this comparative analysis to weigh your options:
| Feature | Option 1: Full Retail Sale | Option 2: Rent and Manage | Option 3: Sell to Cash Investor (As-Is) |
| Net Price | Highest Potential | Varies (Income + Appreciation) | Fair Price (Quick/Certain) |
| Timeframe | 3-6+ Months (Listing, showing, closing) | Indefinite (Long-term) | 7-21 Days (Quick Close) |
| Initial Cost | High (Repairs, staging, holding costs) | Moderate (Initial repairs, tenant prep) | Zero (Sell as-is) |
| Effort | High (Dealing with agents, buyers, contracts) | High (Tenant calls, maintenance, paperwork) | Low (Simple contract, fast closing) |
| Best For | Heirs who have cash, time, and desire to maximize every dollar. | Heirs seeking passive income and long-term asset growth. | Heirs seeking speed, certainty, and freedom from property burden. |
Conclusion: Making the Final, Confident Choice
Inheriting a house in Orlando is a major financial event. By following these steps—securing the property, addressing legal issues, running a deep financial analysis (including the crucial stepped-up basis), and honestly evaluating your personal capacity—you can move forward with confidence.
As seasoned Orlando real estate experts, we specialize in providing tailored solutions for heirs. We can provide you with a complimentary, no-obligation comparison that includes:
- The estimated retail value of your property if fully renovated.
- A projection of potential rental income and associated costs.
- A fair, written cash offer for your inherited home, as-is, with zero closing costs or agent fees for you.
This objective data allows you to easily compare the effort and cost of renting or fixing and selling against the certainty and speed of a cash offer.
Would you like us to provide you with a comprehensive, no-obligation cash offer and a detailed market analysis for your inherited Orlando home today? Call us at (305) 775-8750 or contact us now to take the next step.