Seniors, Don’t Let Deciding What to Do With Your Home Be a Downsizing Dilemma
When you reach your senior years, you become eligible for three things: Medicare, retirement, and downsizing. Up until now, your current home served you well, but if you have more home than you know what to do with, the taxes and utilities are just too high, and/or you’d prefer a smaller home that’s more conducive to aging in place, you should explore the possibility of downsizing. But, what should you do with your current home? Here, Cyndi Lesinski & Associates offers some helpful guidance.
The First Big Decision
Deciding what to do with your home is a big decision, but so is deciding where to live next. Purchasing a new home might seem like the obvious choice, but you’ll want to keep in mind that in addition to the price tag, AssistedLiving.org notes that you’ll need to spend extra for aging-in-place modifications, and these costs can add up. You may find that your best option is to move into an independent living or skilled care community, giving you a smaller space and a community feel in addition to amenities such as housekeeping, meal delivery, transportation, and community events. When looking at local communities, be mindful in your research, and use a directory to zero in on the ideal place.
In the course of formulating your budget, make sure you plan for some of the hidden costs involved with your transition. Selling a home typically means hiring an appraiser, staging your space, and making some repairs. You’ll also need to plan for moving expenses.
Selling Your Home
The housing market trends in many areas are looking more and more favorable, and the ongoing inventory shortage is good news for sellers. You might need to make a few updates to your old home to attract buyers, such as a kitchen remodel, new flooring, or just a fresh coat of paint; but talk with your realtor first before making any big (potentially unnecessary) changes. If you’re willing and able to sell, you may be able to fund the purchase of your next home, not to mention reduce your mortgage, utility, and tax payments.
Renting Your Home
Maybe you’re not quite ready to sell your home or those offers coming in just aren’t ones you’re willing to accept. Renting your home is an option, too, giving you a steady stream of income to help finance your next move. Be selective about your new tenets though in order to avoid unnecessary hassles or expenses.
SmartAsset points out that you need to do your research first, as there may be zoning, state, and federal laws you need to follow, not to mention landlord (property and liability) insurance to protect you from loss. Don’t forget to factor in the biggest piece: profitability. Should you decide to give renting a try, you need to decide whether you want to handle all the landlord duties such as screening tenants, performing inspections, collecting rent, handling maintenance requests, etc., or hand the reins over to a property manager.
Keeping Your Home
If you aren’t ready to let go yet, that’s okay. You can keep ownership of your home by renting it out, but you may prefer to keep it in the family. This can be done by selling/renting it to them, placing it in a trust, leaving it to them in your will, or gifting it to them. Take note that you’re allowed to gift property without paying a gift tax as long as the amount doesn’t exceed $14,000 ($28,000 per married couple) per year.
Downsizing is a huge decision, but it isn’t the only one you’ll have to make. Be sure to review your options carefully before deciding what to do with your home.
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