I inherited a rental property, what do I do now?

Inheriting a rental is equal parts gift and homework. If you are asking “I inherited a rental property, what do I do now?”, start here, and do not rush any big decisions.

Step 1: Get your bearings

Find the lease and confirm who is living there, what they pay, and when the term ends. Locate the security deposit and where it is held. Make sure insurance, property taxes, and any HOA dues are current.

Step 2: Communicate with the tenant

If there is a resident in place, send a simple letter introducing yourself and where to send rent. Do not change the terms mid-lease; an existing lease transfers with the property.

Step 3: Decide keep vs. sell, with numbers

• Get a real rent estimate and compare it to the carrying costs.
• Consider the tax basis step-up that often comes with inherited property.
• Decide honestly whether you want to be a landlord at all.

Common questions

Do I have to honor the existing lease on an inherited rental?

Yes. The lease transfers with the property, so the resident's terms stand until it ends. You also take over the deposit, which needs to move into a proper trust arrangement.

What is a step-up in basis?

For tax purposes, inherited property is generally valued at its worth when you inherited it, not what the original owner paid. That usually shrinks the taxable gain if you sell, and it is worth one conversation with a CPA before deciding anything.

Should I sell an inherited rental or keep it?

Run both paths: what it nets as a sale versus what it earns as a rental against its costs. There is no universal answer, but there is a correct one for your numbers, and it takes about an hour to find.