A Quick Guide on What Downsizing Seniors Should Do with Their Homes
Guest Author, Rhonda Underhill
Frequently, with advancing age, we face the likelihood of downsizing -- and the probability of selling our home. If you've decided to sell, the question of what you should do with the home you’re leaving must be weighing on your mind. Since your home is considered to be an important part of your estate planning, you need all the relevant information that can help you make the right decision.
Options for Your Current Home
In general, you can choose to rent, sell or gift your home. All three of these options have processes that you’d need to become familiar with. If you’d like to rent your home, Fit Small Business details the steps you’ll have to take. These include assessing your property’s rental value, determining if you’ll need a property manager and finding reliable tenants. You can also choose to convert your home into a vacation rental and use the income to pay for assisted living. Choose a vacation rental platform that simplifies the process of listing your rental and handling bookings. Turnkey explains that staying in San Diego puts guests close to popular attractions like the San Diego Zoo and La Jolla, so your rental is situated in a prime location.
Selling a home can have even more steps than renting. To sell your home, you’ll need the services of an attorney and a real estate agent. You’ll also need to be prepared to accommodate prospective buyers as they view the property.
In the final option, you can leave the house in the care of a child in a number of ways. Two of these ways are gifting the house or doing a transfer of ownership. It’s recommended that you consult with an attorney to find the best fit for you.
If you decide to gift or transfer ownership of your house in the care of a family member, the most likely costs you’ll face are attorney’s fees when drawing up documents. When it comes to renting your house, however, there are quite a few costs that The Penny Hoarder encourages you to know about. As a landlord, you’ll need to maintain a fund for emergency repairs and scheduled maintenance. You’ll also need to have landlord insurance and ensure that your property taxes are up-to-date. As a senior, you may decide to use the services of a property manager, so this is an additional cost to add to your budget.
To determine if it’s worth your while, it will be helpful to compare the costs to the rental rate in your area. Selling your home comes with its own set of costs that are usually linked to closing the sale, home repairs, staging the house and real estate agent commissions. As with the rental option, you’ll need to assess if your home’s current value would yield a profit that would make the costs worth it.
Other Important Issues
According to Elder Law Answers, giving your home to a loved one can come with tax consequences. This specifically pertains to the gift tax for which there are limitations. There may also be consequences for your loved one if they sell the house in the future. If you’re no longer in possession of your home, that could affect your ability to access Medicaid coverage for the cost of your assisted living facility. This is why it’s necessary to have your attorney go through all the possible ramifications of gifting your house.
Getting Your Home Ready for Sale
If you decide to put your home up for sale, you’ll need to ensure it’s in the most attractive shape for a buyer. Unless your home needs some major repairs, there are a few simple changes you can make that will boost your chances for a sale. These include ensuring that all the light bulbs are working, repainting the walls, and deep cleaning your house. You should also depersonalize the home by removing personal items and leaving out only a few framed photos to give the home a lived-in vibe.
Deciding what to do with your current house doesn’t need to overwhelm you if you know what you’re dealing with. Whichever road you choose to pursue, make sure it’s in your best interest and won’t interfere with the comfort of your golden years.
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