Seniors Need to Consider the Financial Perspective of Their Home

After years of living independently and countless memories, you’ve made the difficult decision to move into an assisted living facility.

Seniors Need to Consider the Financial Perspective of Their Home

Posted by aneedham - 2019-11-11 10:43:00

After years of living independently, you’ve made the difficult decision to move into an assisted living facility. Despite the years of memories and experiences in your home, you understand that this transition will be for the better. Once you’ve adjusted to the idea of moving into a new living situation, you need to think about what happens to your previous home. Seniors can either entrust their home to a family member, rent it out for monthly income, or sell it for savings. Let’s take a look at some of the financial pros and cons of each of these choices.



Selling Your Property


Listing your home when moving to an assisted living facility is one of the more financially sound and traditional approaches. Before attempting the sale, it’s important to prepare your home and make any necessary improvements. You can read any of the many blogs on this website about improving the value of your home on a budget, like this one for Do-it-Yourselfers.


Pros: Selling your old home is going to quickly put you in the best financial position. In other words, you’ll have a large sum of money from the sale ready for your transition into the assisted living facility. This money can be put toward savings, splurges, or previous debts.


Cons: The major con to selling your home immediately after the transition is that you no longer can pull money from an asset that you spent decades paying off. Furthermore, you may have to make some additional investments in order to make it marketable.



Renting Your Home to Tenants


Property management is a lucrative and fast-growing industry. However, it’s still a great side income for those who are retired. If you’re willing to put in some effort and extra investment, this could be the best way to maximize profits from your old home.


Pros: When renting out your old property, you get to maintain ownership of the home while also receiving a monthly income. This is big news for many seniors who are operating on a fixed income from pension payouts and 401k plans.


Cons: Management fees are the major financial downside to operating a rental. As the property owner, you’ll have to invest in general upkeep, insurance coverage, and a property manager. Although you can still profit after these costs, the investment is still ongoing and considerable.



Entrusting It To a Member of the Family


Many seniors don’t want to deal with the hassle of selling a home or renting it out. Instead, they’d rather keep it within the family for sentimental and practical reasons. This is a fine choice and one that does come with some financial benefits as well.


Pros: Since this would be more of an emotional choice, there isn’t really any financial benefit to this move for an older individual. The only advantage is that they wouldn’t have to sink any more money into the home after transferring ownership.


Cons: A home should always be seen as a financial asset with monetary worth. If you don’t want to rent or sell your home and can’t live in it yourself, you’re really losing out on any financial gain. For seniors in good circumstances, this transfer of ownership may not need to come with any monetary benefits to be a good decision.


Transitioning from independent living to an assisted facility can be a tough move. When raising questions about the future of your old home, it’s important to consider your financial standing and the individual results of each decision.



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