Property and inheritance: make it a win-win

2015-09-03 06:00

One of the things all human beings have in common is the fact that none of us are going to live forever.

It’s not a comfortable thought at any age, but it can be even more stressful as we approach our later years, and are faced with the realities of planning for the day we’re no longer around.

Theocharis says sometimes, instead of holding on to an old property, you should relax and enjoy your golden years.

“It’s difficult, and family homes can have huge sentimental value, but when a property no longer suits your needs, and you can’t keep up with the necessary maintenance and updates, holding on to it is a lose-lose situation for everyone.”

For many people, the focus of these years becomes about protecting the legacy they will leave behind; the savings and investments that will be their last gift to the family they spent their lives nurturing.

This is according to Elia Theocharis, a sales agent for the Rawson Property Group’s Constantia franchise, who says, sadly, this often comes at the expense of their own quality of life and, ironically, can have the opposite of the desired effect on their assets – especially when it comes to property.

“Unless it’s held by a trust, property is not an easy asset to deal with as part of an estate,” he says.

“You can’t divide up the bricks of a property between multiple heirs, and you also can’t accurately predict its future value to use as part of an equitable distribution plan.”

Speaking from experience, Theocharis said, “I do a lot of market-related property valuations and it’s heart-breaking how many elderly couples I meet who, instead of enjoying their golden years, are sitting struggling to maintain these huge, empty houses which are falling into disrepair anyway.”

He says they’re sacrificing their own quality of life to hang on to a property, that their heirs often don’t even want, as they’ve settled abroad, and they are unintentionally decreasing its value by doing so.

According to Theocharis, even properties in good condition lose value rapidly when they no longer conform to area standards, particularly in prestige areas. That means falling 10 or 15 years behind the times can have a huge effect on your home’s value, but who wants to renovate at the age of 80?

“It’s difficult, and family homes can have huge sentimental value, but when a property no longer suits your needs, and you can’t keep up with the necessary maintenance and updates, holding on to it is a lose-lose situation for everyone.”

He says the same thing applies when a property investment portfolio causes more negative stress and admin than the positive value of the income it generates.

“You have to be objective about when it’s time to let go.”

Theocharis advises to make the call when the market is good, and while your property is still in good repair.

“You’ll be able to sell at higher price than if you allow your property to degrade, and you can invest the money in a more liquid asset, that will still earn good returns, provide cash flow in case of an emergency, and still be much easier to divide fairly amongst your heirs when your time eventually comes,” says Theocharis.

“Best of all, you can relax and enjoy your golden years, and give your family a far more important gift than inheritance: your time.”


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