Should you sell, rent, or reinvest an inherited property? The right choice could impact your wealth for years to come. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Amelia Misenheimer, a real estate consultant specializing in helping individuals navigate inherited properties. Together, they discuss the challenges, opportunities, and key considerations when deciding whether to keep, sell, or reinvest inherited real estate.
In this episode, you will learn:
- The key financial and emotional factors to consider before making decisions about inherited property.
- How to evaluate whether a property is a good investment, including assessing rental income, market value, and potential repairs.
- The differences between passive and active real estate investments—and how to determine which is right for you.
- The role of property managers, syndications, and self-management in real estate investing.
- And more!
Tune in to gain valuable insights into making informed real estate decisions that align with your financial goals.
Resources:
www.ameliamisenheimer.com | Connect with Amelia Meisenheimer on Instagram, Facebook, and LinkedIn | Bautis Financial: 8 Hillside Ave, Suite LL1 Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call
Disclosure: The transcript below has been edited for clarity and content. It is not a direct transcription of the full episode, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your host Marc Bautis. Today, I’m joined by a special guest, Amelia Misenheimer. Together, we’ll dive into a topic that’s not only crucial for real estate investors but also for families planning their financial futures.
Real estate is one of the most powerful tools for building wealth, but what happens when it’s time to pass those assets on to the next generation? Without the right planning and conversations, families can face challenges that undermine all of the hard work that went into building their real estate portfolios.
Amelia is here with us today to help navigate this important subject. Amelia is a seasoned real estate investor, military spouse, and industry expert with over a decade of experience in real estate. She began her personal real estate investing journey in 2010 and became a Realtor and Property Manager in 2012. Over the years, she has worked with thousands of clients, helping them unlock the potential of real estate to create passive income, save significantly on taxes, and build generational wealth.
Amelia, welcome to the show.
Thank you, Marc. I’m so excited to be here. I appreciate you having me today.
You’ve worked with thousands of clients and have been involved in countless real estate transactions, including those involving inherited properties. As we discussed offline, not everyone loves real estate or wants to inherit it, yet so many families avoid having those crucial conversations to figure that out.
What inspired you to focus on this issue? Was there a particular inheritance situation that made you realize the importance of addressing it?
Life happened. As you mentioned in the intro, I was a real estate agent for 12 years. I’m still a licensed Realtor in New Mexico, but I was also a property manager. We managed over 450 properties, so I had a broad exposure to real estate—the good, the bad, and everything in between.
There was one situation that really opened my eyes. A significant property owner we worked with passed away, and I got an in-depth look at what happens when a large real estate portfolio is divided among heirs. The tax implications were significant, and, of course, when you have an estate that large, the IRS gets involved. In this case, there was even an IRS audit happening in the middle of everything.
That experience showed me how impactful real estate inheritance can be. My own family has been in business for three generations. For better or worse, my parents never shielded us from financial discussions. I grew up having conversations about interest rates and CDs when I was eight years old, and I had my first bank account at six. That early exposure was a gift.
But I’ve seen many situations where families don’t pass on that financial knowledge. For example, I worked with a client whose father had built a successful real estate portfolio but never taught her anything about it. Before he passed, he liquidated everything, so she inherited cash instead of real estate. Now, in her fifties, she’s trying to relearn what could have been a massive financial advantage if her parents had taken a different approach.
That’s a great point. In this case, the parents never taught their children about real estate. As a financial advisor, I see this all the time. People’s financial skills typically come from one of two places: either they learn from their parents—whether through observation or direct education—or they learn in school.
Schools are getting slightly better about teaching financial literacy, but for a long time, there was almost no education on the topic. Even now, we still have a long way to go before people are truly prepared. A lot of the responsibility falls on families, but parents often don’t know where to start. They might not feel they have the time, or they may wonder what’s age-appropriate. What can an 8-year-old understand? A 10-year-old? A 12-year-old?
Like you said, selling inherited properties might ultimately be the right decision for some people, but heirs should have enough information to evaluate whether that’s the best option. Based on your experience, how should parents approach this? If they own a real estate portfolio, when is the right time to start educating their kids about it?
The earlier you normalize it, the better. I don’t have children myself, so I can’t speak from personal experience as a parent, but I can tell you how I was raised—and I think my parents did a great job.
We were involved in their real estate business from a young age. We went with them to collect rent, helped with repairs, and saw firsthand what it takes to manage properties. I remember being 14 years old, tearing up the carpet in a rental property that was in terrible condition—it was full of filth. That experience was eye-opening. It showed me the realities of rental properties, both good and bad.
What struck me most was that the tenant in that property was a high-powered professional—someone considered an excellent renter on paper. But when we walked into their home, it was shocking. That moment stuck with me because it taught me that what you see on the outside doesn’t always reflect what’s behind closed doors.
Beyond real estate, my parents made sure we were comfortable handling money. We learned how to count cash, how to make change—something that’s almost a lost skill today—and we had bank accounts from a young age.
A personal example: when I was 12, I bought my first bicycle with my own money and wrote a check from my checking account. I was so proud of that moment. To this day, my dad recently fixed up that same bike for me, and it still holds sentimental value because it was a milestone in my financial education.
That’s a great story. It highlights that financial education isn’t just about learning money concepts—it’s about creating meaningful experiences that stay with you.
Exactly. My grandfather played a big role in my financial education, too. He was retired and loved watching financial news—C-SPAN, MSNBC—so he followed the markets closely. But he didn’t know how to use the technology. I was in college at the time and had the tech skills, so he would call me and say, “Amelia, buy this stock.”
It became a fun activity that we did together. He was a farmer, so he followed commodities and futures, and I got to learn from him firsthand. That hands-on experience was invaluable, and more than that, it gave us a meaningful way to connect.
That’s a great example of how financial knowledge can be passed down in a way that strengthens family bonds. It’s not just about the business side of it—it’s about creating shared experiences and memories.
Absolutely. And it also helps remove the taboo around money. As a financial planner, I’m sure you see how many families treat money as a sensitive topic. But at the end of the day, money is just a tool. It can make life easier, it can make life harder, but it’s something to manage strategically. The more open conversations families have about it, the better prepared the next generation will be.
Why do you think so many people avoid having conversations about their real estate portfolio as they approach the end of life?
That’s a great question. I think a lot of it comes down to the fear of death. As a society, we are fortunate—especially in America—because death isn’t as common or visible as it once was. In the past, it wasn’t unusual to lose half your siblings at a young age. In some countries today, frequent deaths mean weekly funerals for those who passed. But in our culture, death is seen as rare, frightening, and traumatic. As a result, anything associated with it tends to be avoided.
No one wants to have that conversation. Even in my own family—my parents own rental properties, and I grew up in that environment—when my mom called me to ask how I wanted them to handle things, my reaction was, I don’t really want to talk about you dying, Mom.
It’s an emotionally difficult topic, but it’s a fact of life. It’s coming for all of us. If you can’t have the conversation yourself, bringing in a professional can help—whether it’s a financial planner, estate attorney, or even a therapist. The key is ensuring everyone is on the same page, so when the time comes, you’re prepared.
That preparation can mean having life insurance policies organized, putting properties in a trust, or filing death deeds. The challenge is that there are so many ways to structure an estate plan—there’s no single right way to do it. The only wrong choice is not doing anything. The most important thing is to embrace the conversation and create a clear plan that everyone understands.
Even if parents don’t want to disclose specific details—like, Sibling A will get this much, Sibling B will get that much—they should still communicate the overall plan. For example, Kids, you’re going to inherit these properties. They’ll be in a trust with a designated trustee. A property manager will handle them, so you won’t have to worry about day-to-day operations.
Having those conversations is powerful. It allows the next generation to be involved in the process. No one wants to lose a parent, but being mentally prepared for what comes next—both emotionally and financially—is invaluable.
You mentioned the importance of organization—not just for the sake of being organized, but also to help ease the burden during a time of grief. The more structure there is, the less scrambling family members have to do. One of the topics you initially brought up was the step-up in basis. Can you explain what that is and how it applies to real estate?
Absolutely. Under the current tax code—which, of course, can change—when someone passes away, their heirs inherit the property at its current market value. This is known as a step-up in basis.
For example, let’s say your parents bought a house 30 years ago for $50,000, and today it’s worth $500,000. If they pass away, you inherit the property at its current value—$500,000. That becomes your new cost basis. If you then sell it for $500,000, you won’t owe any capital gains tax.
On the other hand, if your parents had sold the property while they were still alive, they would have had to pay capital gains tax on the difference—$450,000 ($500,000 sale price minus the original $50,000 purchase price). If the property was a rental, there would also be depreciation recapture taxes.
I recently had this conversation with my parents. Their financial advisor asked if they should liquidate their real estate holdings because inheriting cash is simpler. But I told my mom, You did not raise me to think that way! My mother is in her seventies, and at this stage, it makes more sense to take advantage of the step-up in basis rather than selling and paying unnecessary taxes.
Personally, I’d rather inherit the real estate assets—the rental income, the long-term appreciation—rather than a lump sum of cash. Of course, I always advise working with estate attorneys and accountants to structure things properly. Trusts can be great tools for passing down real estate while protecting investments. But these things take planning. Some IRS rules require certain structures to be in place for a specific number of years before someone passes. Estate planning isn’t something you can do at the last minute—proactive planning is crucial.
You make a great point about the step-up in basis. Many people don’t realize just how much they can save on taxes with proper planning. Using your example, if the parents had sold the property even a day before they passed, they would have owed capital gains tax on $450,000. But if it’s inherited and then sold, the tax liability is zero. That’s potentially hundreds of thousands of dollars in savings.
Exactly. That’s why communication is so important. But things get even more complicated when siblings are involved.
What happens when siblings have different ideas? One may want to inherit the real estate, while another just wants the cash. Have you seen situations where parents divide their estate in a way that tries to accommodate these differences?
Absolutely. I’ve seen all kinds of scenarios.
In one case, grandparents specifically assigned certain properties to different children and grandchildren because of sentimental value. But when the estate was reviewed, it turned out that the property values were very unequal. The executor ultimately decided to divide the assets more evenly, overriding the grandparents’ original intent.
In another case, a father left his struggling business to one son and cash to another. At the time, the business wasn’t worth much—it required years of hard work to build up. Meanwhile, the other son got a house and a pile of cash. Fast forward 50 years, and the business is now thriving, while the son who inherited the cash has spent it all. He now works for his brother at the company and is resentful about how things turned out.
Sibling disputes over inheritance can get ugly, and that’s a real shame. But having open discussions ahead of time can help. If children are involved in the planning process, they’re more likely to take ownership of the outcome. They can’t turn around later and say, This isn’t fair, if they were part of the decision-making process.
From the perspective of the person inheriting a property, how should they determine whether to keep or sell it? Sometimes, people get emotionally attached to a property, even if it’s not the best financial decision. What factors should they consider?
This is exactly the kind of conversation I have in my role as a real estate consultant.
For example, I have cousins who grew up in a small town in New Mexico. Their parents own rental properties there, but my cousins have all moved away. They have no interest in managing real estate in that town. So they’ve had discussions with their parents, and as a result, their parents are selling off the properties rather than leaving them as part of the inheritance.
If you inherit a property and it doesn’t fit your lifestyle or investment goals, there are creative ways to sell it. You could:
- Sell it on a real estate contract, where the tenants—if they love the home—buy it gradually. This allows you to make an extra 8–10% on your money while receiving steady monthly income.
- Sell the entire portfolio at once if you inherit multiple properties and don’t want to manage them.
- Use a 1031 exchange to reinvest the proceeds into a different property, deferring capital gains taxes and putting the money into something that better fits your needs.
The bottom line is: just because a property worked well for your parents doesn’t mean it’s the right investment for you. The key is to assess the numbers objectively and determine what aligns with your long-term financial goals.
So then, what is that “something else”? Is it a multifamily property in a different market that’s more suitable for you? Is it investing in a syndication? Or is it exploring other avenues that align with your goals? It could even be as simple as putting the money into stocks, being content with how it grows—and there’s nothing wrong with that either.
The key is empowering the next generation to have a plan and clearly outlining that plan. For example, if you’re going to inherit a set of properties but already know you want to sell four of them, then acknowledge that upfront. Maybe offer your siblings the first opportunity to buy them. They might inherit fully paid-off properties, refinance them, and give you the cash while keeping the assets that better align with their own financial goals. Ultimately, it comes down to having honest conversations, even when they’re difficult, and being clear about what you want—or don’t want.
As a consultant, how do you approach a situation where someone inherits a property but isn’t sure what to do with it? Maybe they’re considering keeping it because it seems like a good investment, but they don’t really know how to evaluate whether it’s performing well. How would you guide them in making that decision?
That’s a great question. There are a few key pieces to consider. First, when you inherit real estate while dealing with grief, it’s important not to make any rash decisions. Take some time to process everything—let the dust settle before jumping into big choices.
Once you’re ready to evaluate the property, look at a few things: Can you depreciate it? Depreciation is a huge tax benefit of real estate ownership. What kind of income is it generating? And is that income at market rate? A common issue, especially with older generations, is that they don’t raise rent to keep up with the market. A property might still be renting for $700 a month, even though the market rate is twice that.
So, step one is assessing whether rent can be increased to market levels. Step two is evaluating the condition of the property. Has it been properly maintained, or is it a deferred maintenance nightmare? Some families take the “duct tape and wait until tomorrow” approach, and suddenly, you’ve inherited a major remodel project. If fixing up properties isn’t your thing, you might be better off selling and investing in a turnkey property that better suits your needs.
That’s where individualized conversations become crucial. What are your goals? What time commitment are you willing to make? Flipping a property isn’t just a financial investment—it requires time, focus, and constant follow-up. Some people love that challenge; others would rather have something more hands-off. Being honest about what fits your lifestyle is key.
Many people struggle with understanding the different levels of involvement in real estate. Some hear about syndications, others want to flip houses, and then there’s the idea of “passive income.” How can someone new to real estate figure out how much work a given investment will actually require?
That’s a great question because “passive income” gets thrown around a lot, but in reality, real estate is rarely truly passive.
The most hands-off investment is a syndication—where someone else manages your money, much like a financial advisor handling stock investments. You invest, they manage the properties, and you receive periodic distributions. However, syndications typically require a longer commitment, often five years or more.
A step up from that is owning rental properties with a property manager. If you inherit properties that are already under professional management, the easiest option is to simply maintain that setup. You’ll still be involved—answering occasional questions, approving repairs, and reviewing financial statements—but overall, it requires just a few hours a month.
That said, one of the biggest mistakes I see is investors not reading their statements. It’s critical to monitor rent collection, expenses, and whether rent is staying at market rates. A good property manager should handle this, but it’s your responsibility to verify that things are being managed properly.
For those who want full control, self-managing is the most hands-on approach. This means handling leases, screening tenants, coordinating repairs, and dealing with issues firsthand. If you’ve never done this before, it can be overwhelming, but it’s also one of the fastest ways to learn real estate. However, it’s not for everyone—so again, the key is figuring out what fits your lifestyle and skills.
Ultimately, there are many ways to get involved in real estate, depending on what works best for each person. Amelia, thank you for joining me today! Before we wrap up, where can our listeners find you and learn more about what you do?
I’m on all the major social platforms—Instagram, Facebook, and LinkedIn. I also offer free 20-minute discovery calls for anyone who wants to chat about their real estate challenges. I’m open to any type of question or conversation because I believe in having real, honest discussions. Too often, real estate is portrayed as this “frilly” passive income dream, when in reality, it requires careful planning and sometimes tough conversations—especially around estate planning and generational wealth.
Great. Well link to all that in the show notes. Thanks again, Amelia. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.
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