If you’re considering moving in with family or to an Assisted Living Facility, then it’s a safe bet that you’re also wondering what you should do with your home. Before you make a move, there are a few things you will need to take into consideration first.
Options for Your Home
The main options for your home are putting it up for sale, turning it into a rental property, or leaving it in the care of a relative. If you’re going to sell your house, make sure you research how much it’s worth. There’s a Process that involves getting the house prepared, advertising or engaging the services of a realtor, and securing a buyer. You’ll also need to ensure that you’ve set The Right Price for your house, as suggested by House Logic, by researching the comparable sales of homes in your area. Renting your house also involves Several Steps including getting the home set up for rental, finding reliable tenants, getting to know the fair housing laws appropriate to your state, and preparing a rental agreement that protects both yourself and your property. Finally, Leaving Your Home in the care of a relative generally involves legal documentation for which consultation with a lawyer is highly recommended.
Financial Impact of Each Option
Apart from the legal fees needed to prepare the necessary documentation for leaving your house to a relative, there aren’t many expenses associated with this option. Unfortunately, giving up a home means disposing of your largest asset and potentially giving up on future streams of income. Selling a house, however, according to Bank Rate, usually Requires Spending a bit of money. This includes the cost for carrying out any necessary repairs, staging the home for sale, realtor commission fees, and the applicable closing costs of the sale. The advantage of selling the house, though, is that you’ll receive a lump sum of cash, and you’ll no longer be responsible for paying a mortgage or maintaining the property. Renting also comes with its Own Set of Costs. Before renting the property, you’ll need to make any necessary repairs and get the home ready for a tenant. As a landlord, you will still be responsible for paying the mortgage if applicable, conducting scheduled maintenance activities and emergency repairs, as well as keeping your insurance current. You may also need to engage the services of a property manager to handle the major responsibilities because you may not be able to. The good news is that when handled properly and with the right rental price, a rental property can provide a decent income stream, and you’ll still be able to sell the property later.
Other Possible Effects
Apart from the financial impact the previously discussed options may have, Estate Plans Plus also details some Things You Should Know before selling or transferring ownership of your house. There could be income tax complications based on the Principal Residence Exclusion, so it’s important to ensure your lawyer explains this to you before you proceed. There are also some possible implications with regards to Medicaid coverage of nursing home care depending on the home’s value and when the transfer is made.
Handling the Proceeds
If you are renting the property, you will need to determine if you will invest those earnings or put them toward Costs Associated with Assisted Living, which had a median annual cost of $48,000 this year. More seniors are also selling their homes to Cover These Costs as this will allow them to easily budget the lump sum they have earned from the sale.
While this article presents three viable options for what you could do with your home after deciding to move into an assisted living facility, the best choice will always be what works for your particular situation. It’s important to ensure that you won’t be put under any undue stress while living out your golden years.
Photo courtesy of Pixabay Article by: Rhonda Underhill