This unique article was contributed to the Boston Real Estate Observer by Tina Martin. Tina’s job is to help others achieve their dreams, so she started Ideaspired to inspire a wider audience.
Sometimes downsizing is a no-brainer.
Maybe you’re tired of the empty nest, your budget is getting tight, or you simply have too much house and not enough time to deal with it.
Sometimes it’s a tougher choice, especially if you can’t make up your mind about what to do with the old home.
Deciding what the future holds for your current house can be complex, especially if you have lived in it for a long time.
Your decision might be further complicated if you’re planning to move to an assisted living community. These communities are a terrific downsize choice for seniors, offering safety, comfort, and independence, and you can have an apartment-style home. Some offer holiday parties, fitness and entertainment centers, and transportation services, and all provide help with your daily tasks as needed.
If you’re going that direction, seeing communities first-hand is the best way to make a selection. You can always do a little window shopping in the meantime by looking online.
While you’re exploring your moving options, heed the following advice from Stuart St James when deciding what to do with the family home:
Put Your House to Work
Some seniors like the idea of both hanging onto the house and making money from it in the form of rent. However, as The Balance Small Business points out, landlords have a variety of responsibilities, and those responsibilities go on 24/7.
Maintenance is an ongoing burden, and you need to do things like collect the rent, advertise for tenants, keep your books, and deal with problematic tenants. On top of all that, you’re still paying for insurance coverage, property taxes, and utilities. Those costs might be fully offset (and then some!) by your rental income, though.
Those seniors who plan to live close and like the idea of tinkering with the old abode might find some of those aspects appealing. If you’re game, there are apps that lighten your workload. Another idea is to hire a property manager to take on the rigamarole, allowing you to just take in the rent checks – just remember a property manager will take about 10 percent out of the rent you earn, plus extra for fees and maintenance.
Seniors Put Homes Up for Sale
Probably the most obvious option is to list the house for sale. It frees you up from the burden of ongoing maintenance and financial responsibilities, and the hassles of dealing with tenants.
You do have to prepare the house for the listing, which might include cleaning and making upgrades to get a good offer. Sometimes sellers decide to sell a home furnished, which might be ideal if you’re heading to assisted living. Similarly, if your home needs major work, selling it as-is is an option. Your real estate agent can give you practical insights into the local market and help guide your choices.
Seniors Pass Home to Family Members
When it comes to following your heart, passing your house to family members might sound like the best solution. However, Bankrate points out this option becomes complicated quickly. It could be included in your estate after your death, but that doesn’t free you from ongoing taxes, insurance, and so forth. Giving it to someone right now, outright, will sometimes involve gift tax.
Some people think they can sell the property for $1, but that can get you in trouble because of fair market value principals. Additionally, it’s important to understand Medicaid has a look-back period of 5 years. That means if you apply for Medicaid within 5 years of the sale, your status could be affected. Because this choice is so complex, we recommend homeowners visit with an estate planning attorney before jumping into a decision.
The Full Financial Picture
There is a lot to consider as you piece together the right solution for your circumstances. Remember that your new home might need aging in place changes, and even if you sell your house or keep it for passive income, you’ll have ongoing living expenses wherever you decide to live.
Budgeting for your move is another must. Make sure you get prices from several professional movers, and compare what their quotes include as you do so. Also research what previous customers have to say about their experiences so that you can make an informed decision. Go the extra mile in checking them out; an ounce of prevention is definitely worth a pound of cure when it comes to finding a mover who is reliable and trustworthy.
Deciding what to do with your home can be tough. Sort things carefully and get professional insights when necessary. There are several financial and personal motivations to contemplate, and you need to do what’s right for your future.
Keith Munsell 
