It’s natural for parents to want to help their adult children financially if they have the means to do so. Half of parents with kids 18 and over provide them with some financial support, a recent Savings.com survey found.
But it’s one thing to get the occasional $300 check to help with groceries or car payments. It’s another thing to get a paid-off house.
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Say your parents gifted you and your spouse their home because they’ve decided to move to another country. This could be a game-changer — especially if, as a couple, you’re earning a modest $100,000 salary combined and have $15,000 in credit card debt hanging over your heads.
What should you do with this incredible gift? Rent it out for income? Sell it for a lump sum? Or move in and live rent-free? All options are good, but they’re not all equal.
The pros and cons of renting it out
If you can charge enough rent to more than cover the cost of property taxes, insurance, utilities and general maintenance, that’s extra money for you to pocket each month.
Depending on how much rent you’re able to demand, that income could help you whittle down your credit card debt in a short period of time. Plus, most homes tend to appreciate in value over time.
During the first quarter of 1995, the median U.S. home sold for $130,000, per the Federal Reserve. During the first quarter of 2025, the median U.S. home sold for $416,900. If you hang on to the house and rent it out for a decade or longer before you sell, you’ll likely be well ahead on total profit compared to selling right away.
On the other hand, renting out a home means you’re taking on the potential hassle of being a landlord. Sure, you could get lucky and end up with a steady stream of wonderful tenants who pay their rent on time every month and never cause problems. Or, you could get stuck with tenants who damage the property, complain about issues constantly and force you to chase them down for rent.
When you rent out a home, there’s also the risk of having it sit vacant in between tenants. If you earn a combined $100,000, you may not make enough money to comfortably cover your own bills plus the cost of maintaining the gifted house.
If you’re trying to get out of credit card debt, you may feel more comfortable selling the home and taking the money right away.
Remember, too, that rental income is income the IRS gets a piece of. That introduces not only a tax liability but the hassle of reporting the earnings. While you can potentially deduct some of the costs related to that home on your taxes, you may need an accountant to figure out how to handle that aspect. That’s yet another expense.
The pros and cons of selling
Selling a paid-off home is a good way to pocket a potentially large sum of money in one fell swoop. The National Association of Realtors put the median existing-home sale price at $403,700 for March 2025. That represents 21 consecutive months of annual price increases.
Put another way, the housing market is still hot, and sellers are still commanding high prices. So, even if the home you’ve been given isn’t worth as much as the median U.S. home, you might still end up with a nice sum. That’s money you can use to easily pay off your credit cards and invest for your future.
Plus, if you sell the house now, you won’t have to worry about ongoing costs like property taxes and insurance.
Remember, because it wasn’t your house initially, you don’t know what issues may be lurking in the walls or beneath the floorboards. If you don’t want to risk the cost of repairs, unloading the house immediately could be a safe bet.
On the flipside, we just saw how much home values rose over the past 30 years. If you were to hang on to the home for the long haul, you might be able to sell it for a much higher price than what you can get today.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
Depending on where the home is located, keeping it could also give you more options for retirement. Say the home is located in an area you feel is nicer than yours but less accessible to jobs. You may not want to move into the home now. But it could be a great place to move into once you retire and are no longer working.
You’ll lose that option if you sell it now. And while you could always seek to buy in that area once you’re actually retired, at that point, you’re taking the risk of home prices rising and not being able to afford one.
Before making the decision, make sure to speak to an advisor who can inform you about the tax implications of selling. Receiving a house for free and then selling right away could come with a substantial tax penalty, and you may be able to reduce the pain with a few smart decisions.
The pros and cons of moving in
The nice thing about a mortgage-free home is that you only have to pay for property taxes, insurance, utilities and maintenance.
If taxes and insurance aren’t so high and the maintenance is something you can manage yourself, it could be far less expensive to move than to stay in your current home — especially if you’re renting. That’s money you can use to pay off your credit cards.
Keep in mind, if you’re trying to pay down your credit cards, the expense of a move might put you deeper in debt temporarily.
Consider whether the home you were given is in a more desirable area with more amenities. Will it leave you with a longer commute or put you farther away from friends, or would moving there improve your quality of life? Some benefits can be hard to put a dollar figure on.
Finally, if you’re renting now, remember that while you’re responsible for paying your landlord every month, maintenance is not your problem. If you move into the house, you’ll have to deal with everything from mowing the lawn to fixing the faucets when they leak.
If you have a busy schedule or a demanding job, homeownership may not be a good fit for you. You’ll need to be honest with yourself about your ability to take care of a house before making the decision to move in.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
