What About My House? Helpful Information for Downsizing Senior Homeowners
You’ve already made the decision to move into an assisted living facility and now it’s time to make another difficult decision — what to do with your current house. There are usually three main options for you to consider, so let’s look at what each one entails.
Option One: Leave It to a Relative
If you were planning to leave your house to a relative at the time of your passing, then this option may have occurred to you already. To do this, you’ll need an attorney to draw up the necessary legal documents. There are different types of deeds that can be used to transfer ownership to a relative, so you should research which one will be in your best interest. While you can gift your house to your child, there might be significant tax consequences for your child depending on what they decide to do with the house. According to Elder Law, if you gift your house, you may also lose your eligibility for Medicare benefits related to long-term care.
Option Two: Convert It to a Rental
In this option, you would move from being a homeowner to a landlord. However, there are many things to consider when doing this. First, there a number of costs associated with renting a property. These can include landlord insurance as well as the legal expenses of preparing rental agreements. Since you still own the property, you will still be responsible for the mortgage payments and property taxes. You will also need to pay for the scheduled maintenance of the house and make sure the building remains up to code. If you’re going to be in an assisted living facility, it’s unlikely that you’ll want to be involved in running the property, which means you’ll need a property manager. Property managers can charge flat fees between $100 and $300 for services such as communicating with tenants and collecting rent. Still, Retipster details how you can generate a steady monthly income with the proper system in place.
Option Three: Sell the House
With this option, you would trade the potential for monthly revenue for a one-off payment. There are still certain expenses involved with selling a house, which can include closing costs, the real estate agent’s commission, and the real estate attorney’s fees if you choose to use one. Bear in mind that you may also need to pay for repairs to get the house in the proper shape to be sold. If you’re still paying a mortgage, then the funds from the sale will first be used to pay off your loan. If your mortgage is still significant, then this might not be the best option for you. Before you can make that decision, though, you should follow these tips from the experts at NerdWallet to determine how much your house is currently worth.
Getting the House Ready
While it’s nice to clean up the house if you’re giving it to a relative, the process can be even more intensive if you’re planning to rent or sell the house. When getting the house ready, you’ll need to perform all major and minor repairs that would affect the house. You should also fix or replace broken fixtures. You should remove all clutter and depersonalize the house by putting away personal items such as photo albums. That part of the process shouldn’t be too hard as you would have been planning to do that anyway since you’re downsizing. After doing that, HomeAdvisor explains that you can make the house appear fresher by painting and sprucing up your curb appeal with some landscaping. After doing all that, you can work with a reputable real estate agent to get the house sold or rented.
Andrea Needham is the creator and editor at Elders Day. A lifelong writer, she created her website to share information and resources with other seniors who love living it up as they age. Andrea believes our golden years don’t have to be a time to slow down, and she looks forward to sharing the many health-boosting, fulfilling activities and experiences that are perfect for aging adults.
And lastly, a big thank you to contributing editor, Andrea Needham, who is the creator and editor at Elders Day. A lifelong writer, she created her website to share information and resources with other seniors who love living it up as they age. Andrea believes our golden years don’t have to be a time to slow down, and she looks forward to sharing the many health-boosting, fulfilling activities and experiences that are perfect for aging adults.