Downsizing is an excellent solution for seniors who want to age in place but aren’t able to continue living in their home. Many older individuals face a difficult choice when they must move out of an old home in order to find something more suitable. In general, downsizing seniors can choose to keep their house within the family, turn it into a rental property, or place it on the market. The best choice truly depends on the financial situation of the senior. Here are the advantages and disadvantages of each option.
Keep the house within the family.
Many seniors have financial pressure to sell their home before settling into a smaller one. It can be an emotional experience to sell a home that’s been in your life for so many years. With so many memories tied to their old house, some seniors opt to retain ownership instead of selling it. Keeping the home within the family is a great way to accomplish this goal without having the responsibility of caring for the home on a daily basis.
The primary downside to this option is the lack of income from a valuable asset. This may be tough for seniors who have spent decades paying off their mortgage and need extra money to put toward a new home.
Convert it into a rental property.
Turning an old home into a rental property is another choice a senior can make when downsizing. The primary advantage of this option is the monthly income that will be generated by the property. Since many seniors struggle with fixed incomes, this monthly income can provide a nice cushion. Instead of selling their home right away and losing ownership of the property, seniors can become a landlord and hold onto their property while still seeing a return on their initial investment.
Although renting their home could be profitable for seniors, it may not be feasible given all of the work required. Managing a property takes significant energy and time. Unless a senior lives near the property and has the physical ability to care for it, a professional property manager may be the answer. Even with this extra expense, seniors can still come out on top financially.
Place the home on the market.
Seniors who prefer a straightforward and hassle-free approach will prefer to simply place their old home on the market and use the income toward their new home. This option provides seniors with an instant return on their investment and will most likely leave some extra money for medical bills or savings. Before making a final choice on the home’s listing price, it’s important to take note of the average selling price for properties in the area. You can also utilize online tools to see recent sales nearby. The right tool can give you an idea of what your home is worth but do not settle on a number before talking to your agent.
If you make the choice to place your home on the market, make sure to speak with an agent to ensure you get the most out of the sale. Realtors can provide you with some critical information regarding the preparation and staging processes required before listing the property. In addition, the best and most trustworthy realtors will tailor the home selling process to you so that you know you’re settling into the right spot before selling your home. Don’t sell your most prized asset until you’re sure you can find a comfortable landing spot.
Seniors benefit a great deal from downsizing into a new home. To make the transition even more successful, individuals should take the time to decide their best options for handling their old home.
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