
Ask HN: Large inheritance windfall. What next? - thrownaway_help
Throwaway here, for obvious reasons, though I&#x27;m a regular visitor to HN.<p>My parents left me a bit more than expected in their will. We&#x27;ve discussed the matters before, but now that it&#x27;s in effect, so to speak, I&#x27;m unable to ask them for their advice any longer. Thanks to my tech salary I&#x27;ve already paid off my student loans, and have no outstanding debt. My question lies not in what to do with the liquid assets my parents left me (we&#x27;ve talked about it), but with their surprise parting gift: about $1.5 million in ownership of multiple home properties.<p>My parents rented these houses out for a total of around $70k&#x2F;yr (before taxes) as passive income in their retirement (though my father did manage the properties himself). They also left me the house they raised me in. The value for these houses has always been fairly stable, though recently they have been increasing in value at about 7-10% year.<p>I&#x27;m currently unmarried (my parents were old for my age), but I&#x27;m hoping to marry soon and eventually raise a child. What&#x27;s the best course of action to ensure not only a comfortable future for me, but also to ensure the best possible future for my familY? I&#x27;ve always wanted to potentially take a break from my tech job to pursue a startup, and now I feel like I may have the means to do so without jeopardizing my family&#x27;s future. Is temporarily living on the income from rent advisable to do this, or should I just sit on the houses until they accumulate some optimal value to liquidate and invest at, or should I keep my job and put the passive income from the rent into buying another property and snowballing from there (though real estate really isn&#x27;t my favorite thing in the world... I&#x27;m sure I could pay someone a cut to manage the properties, though)?<p>Lawyers and accountants are helpful in making any of these options happen, but to do so requires I actually know what I want them to do. This is a very generous gift on my parents&#x27; part, but I&#x27;m a little overwhelmed.
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charlesdm
Are they still generating $70k/yr? How many properties are we talking?

I personally prefer investing in the stock market vs. property, because 1)
property taxes, 2) tenants, 3) things break, etc etc. But others won't share
that opinion. If you like property, you can also invest through REITs, which
are publicly traded real estate funds that pay dividends.

One reason why I would not sell these houses is potentially taxes. Are you
liable to pay capital gains tax on these? Or was the counter on those gains
wiped when you inherited them? With interest rates being low, asset prices
tend to increase fast(er). So if possible I might consider selling them.
Depends on the property, city, location, etc.

$1.5m is still low enough that you can achieve above average returns by
investing well in smaller deals and/or individual stocks, i.e. 10-30% a year.
If I were you, I'd throw in the towel at your job and start learning how to
invest your capital properly. And once your money is working for you, you can
explore other entrepreneurial projects.

Invest in what you know, i.e. public technology companies, or buy a small tech
company with some equity down + an SBA loan, etc etc. Put some of it in an S&P
fund after a market decline. But take your time, don't rush it. A little
capital can go a long way.

You're free, congratulations. Most people don't ever get there. Just keep
reinvesting your profits, it snowballs faster than you realise if you don't
blow it all on useless stuff.

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thrownaway_help
There are 3 properties, 4 with the addition of my parents' home (which I
believe I could probably rent for more than the others, to generate at least
around $100k total). They three are all rented out for (at a minimum) the rest
of 2017.

I believe the tax basis on the homes has been reset with their passing, so
capital gains would be set to $0 if I were to sell immediately (but as we have
renters, I don't foresee that happening). These houses are also in a state
that doesn't have state income tax, for what it's worth. Sales tax is
relatively high though.

I'll definitely be reading more books to get a better grasp on the situation,
too - thanks.

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caminante
[https://www.reddit.com/r/personalfinance/wiki/windfall](https://www.reddit.com/r/personalfinance/wiki/windfall)

