Why Waiting to Inherit a Home is a Risky Financial Strategy

Relying on a future home inheritance as a primary housing plan is a high-risk strategy that can cost you years of equity growth and financial stability. While the prospect of a windfall is tempting, experts warn that inheritances are unpredictable. Buying a home now, even if you expect to inherit later, provides immediate tax advantages, builds equity, and gives you more control over your financial future.

What Are the Risks of Banking on a Home Inheritance?

The most significant risk is uncertainty. The timeline for receiving an inheritance is rarely guaranteed. Parents or relatives may live longer than expected, or their financial situation could change. For instance, they might need to sell the property to fund long-term care. A study from 2023 found that retirees in 41 states and Washington, D.C., are projected to outlive their savings, with an average shortfall of over $115,000. This reality increases the likelihood that a planned inheritance may not materialize as expected.

Furthermore, legal complications can arise. A will—a legal document dictating asset distribution—can be changed. Properties can become stuck in probate, the court-supervised process of validating a will and administering an estate. If a home is passed to multiple heirs, it can lead to disputes over selling or keeping the property. As Brooklyn-based real estate broker Alexandra Gupta notes, “Many assume they’ll ‘just move into Mom and Dad’s place,’ but lifestyle needs, location preferences, or sibling dynamics often make that unrealistic.”

What Financial Benefits Do You Miss by Waiting?

By postponing homeownership, you forgo the opportunity to build equity—the portion of the home you truly own, calculated as the property's market value minus any outstanding mortgage debt. While it once took about five years to recoup homebuying costs, it now takes closer to ten. The earlier you buy, the more time your investment has to appreciate.

“If a young person buys a $350,000 house today with a 6% mortgage, in 10 years they might gain tens of thousands of dollars in equity as the house appreciates,” explains David Cohen, a real estate lawyer at Cohen Property Law Group.

You also miss out on significant tax benefits exclusive to homeowners. These include the mortgage interest deduction, which allows you to deduct interest paid on your home loan from your taxable income. When you sell, you may qualify for a capital gains exclusion, letting a portion of the profit from the sale be tax-free. Meanwhile, the rent paid while waiting is money you will never see a return on.

How Does Owning a Home Now Give You More Options Later?

Owning your primary residence doesn't cancel the value of an inheritance; it enhances it. If you already have a home when you inherit another property, that second asset provides flexibility. You could:

• Generate rental income.
• Use it as a vacation home.
• Sell it and use the proceeds to pay down your existing mortgage or invest elsewhere.

“Owning a home is a form of diversification,” says Gupta. “Depending on a single future property can be risky—care costs, estate taxes, or market changes can reduce what’s ultimately inherited. Buying now gives clients both control and security.” This is especially important when an inheritance is shared among siblings, as proactive discussions about the property's future can prevent conflict.

What Should You Do If You Expect an Inheritance?

The most prudent approach is to plan independently for your housing needs while having open conversations with your family about their estate plans. As Shane Swanberg, CEO of Bridgehaven Homes, emphasizes, “Someday is not a financial plan.” He advises, “I always propose going in both directions: Discuss estate plans with your family, and plan independently for your own housing needs.”

David Cohen recommends that families consider living inheritances, where assets are transferred while the grantor is still alive, but cautions that these require careful legal planning. Cohen shares an example: “I recently had a client in Dallas who bought a condo pending an inheritance. By the time the aunt passed away, the condo had appreciated by 20%, giving the client financial leverage that would not have existed if they had waited.”

Ultimately, a home inheritance should be viewed as a potential bonus, not the foundation of your housing security. If you are financially prepared to buy a home that meets your current needs, there is little reason to delay. You can build wealth and stability today while remaining open to a future inheritance.