Sell, Rent, or Transfer: Options for Seniors in the Midst of Downsizing
There are many circumstances in which moving into a smaller home makes more sense than continuing to live in a property that becomes burdensome. Many seniors find themselves in such a predicament due to physical ailments associated with aging. Despite a desire to continue aging in place, older individuals may need to downsize in order to find something more manageable and affordable. One major decision involved in this transition is the fate of a senior’s prior property. Depending on the individual’s unique circumstances, the home can either be sold, rented out, or transferred to a relative.
Selling It for an Increase in Capital
When purchasing a new property, most people instinctively assume that selling their prior house is the only viable option. While there are potential alternatives, this is certainly the most financially stable option. By selling their old home, seniors free up a significant amount of capital that can be put towards their new property. Due to the nature of downsizing, seniors should have some extra income left over to pay off bills, put toward savings, or to take a short vacation.
Seniors who decide to sell their property should hire a real estate agent to help ensure each step of the process goes smoothly. Real estate agents will ensure that your asking price is low enough to generate interest and high enough to leave you with a nice cushion. These professionals can also help you stage your property for listing photos and open houses. Make sure to hire a local real estate agent for a more focused approach.
Transforming It into a Rental Property
There are some seniors who don’t have to worry about affording their new property. With no financial need to sell your old house, you may decide to hold onto it and rent it out instead. This option will still provide you with a return on your investment while allowing you to maintain ownership of the property. You might even end up making more money through this monthly revenue as opposed to one lump sum from a sale.
Be sure to take note of the expenses that come with maintaining a rental property. For example, you’ll have to invest in repairs, such as structural damage and HVAC issues. For seniors who don’t have the energy or time to run the property themselves, there will also be an added expense of hiring a reputable property manager to look after things. You’ll still be able to come away with a positive monthly income, but these costs should always be accounted for.
Transferring Ownership to a Relative
Some older individuals won’t take money into consideration when deciding what to do with their old property. After decades of making memories, raising children, and celebrating holidays, it’s common for seniors to have a sentimental attachment to their house. Instead of selling it or having strangers live there, you can opt to transfer ownership of the home to a relative. You can rest assured that the home will be cared for without having to maintain it yourself.
If you’re downsizing into a new property without selling your old one to cover the cost, be sure to determine how much you can realistically afford to spend. Take a look at your income and savings account as well as the average price for down payments in the area. Setting a budget is a great way to ensure you don’t end up with a home that’s too expensive.
Seniors in the process of downsizing need to consider whether selling, renting, or giving their home to a family is the best option given their current financial circumstances and desires.
Photo Credit: Pixabay
Jim Vogel
Elderaction.org
jim@elderaction.org
