Article by: Jim Vogel
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We often talk about the many benefits related to downsizing, like a shrunken utility bill, less trouble staying organized, and cutting down on how much time and money goes into upkeep. However, many seniors face a major hurdle in what to do with the home they are leaving behind. If you’re feeling stuck, read on as we explore a few of the popular choices seniors can make and how they might apply to you.
Your home is a big investment, and before you make up your mind where it will end up and how it gets there, it’s important to know its value in the marketplace. For example, homes in Pittsford sold for an average of $294,000 last month. Do some looking at recent sales, paying particular attention to properties similar to your own. You can even hire an appraiser (for an average of $300-$400) for an accurate figure, which could be needed in the event you decide to keep your home or are contemplating selling your property to pay for your next home.
As we age, sometimes certain activities that used to be easy become more challenging. Many seniors start struggling with activities of daily living, like taking medications and getting dressed, yet still enjoy an independent lifestyle. If that scenario sounds familiar, don’t rule out assisted living communities. They can help with those daily incidentals so you can keep doing the things you enjoy.
Beyond basic support, assisted living communities have a built-in social life, often provide group activities, and even have different living arrangements to pick from, like one-bedroom apartments versus having roommates. As you explore your options, keep in mind it’s best to visit facilities for an in-person assessment.
Selling offers obvious advantages to those in the midst of a downsize. If your current home fetches a high enough price, you might be able to pay for the next place outright. Carefully planned, there could even be funds left to add to your retirement cushion, set aside for an emergency, pay off debts, or even purchase that little getaway spot you’ve dreamed about.
The main disadvantages in selling come in the form of potential taxes, and the loss of being able to do something else with it, like give it away or rent it out.
Turning your home into a rental offers enticing advantages. It means it can be a moneymaker for you, and on top of that, you get to keep the place. It might sound like a no-brainer, but it’s important to remember that you will still be responsible for taxes, utilities, insurance, and upkeep. What’s more, you have the expenses that go hand-in-hand with managing a rental, like advertising it and screening applicants. If you get bad tenants, you could face legal fees as well.
Note that long-term rentals aren’t your only option these days. If you live in an area that’s desirable for tourism, turning it into a vacation rental might be worthwhile.
In either case, both short- and long-term rentals can be helped along by hiring a property management company. If you don’t live close to the house, aren’t a handyman type, or just don’t want to mess with the work involved, a property manager can take the reins on your behalf and just send you the money each month.
Giving your home to a loved one has obvious sentimental value. However, there are often major complications involving finances and legal standing, and if you end up requiring long-term health care in the near future, Wealth Management points out you should be alert to the Medicaid look back period. Between taxes, legalities, and health care, things get complex quickly, so it’s generally advisable to meet with an attorney if you would like to explore this idea fully.
When it’s time to downsize, there is a lot to think about. Thankfully, seniors have plenty of great options. Know your home’s value, think hard about your needs, and get professional assistance when things are complicated. In the end, you can rest easy knowing you made a great choice.
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