Moving is always a stressful event, but for seniors heading into assisted living, at the top of their stressors is often a particular dilemma: What should be done with the home they’re leaving behind? Rent, sell, or give it away? Read on as we hit the highlights of each option.
Enjoy Ongoing Income
When you have an empty house, there are a couple of ways you can turn it into a money maker. Renting the home is a popular solution, and these days, there are different methods of making that happen.
One rental option is aim for long-term tenants. While on the surface this might sound simple, it’s important to note that becoming a landlord goes hand-in-hand with added responsibilities, like keeping up with maintenance, collecting rent, and finding renters. MillionAcres explains that while long-term tenants provide steady income, it isn’t the money makera short-term rental can be.
That brings us to the option of short-term renters, typically in the form of vacationers. You still have the expenses of maintenance, taxes, and insurance for a vacation rental. However, those who live in areas that draw a steady flow of tourists can often profit nicely from this choice.
For seniors who aren’t looking for added work, a property manager should be considered. A property manager can take over the bulk of the work and just send the rent to you each month. This way, you and your family members are off the hook on the drudgery of being a landlord, but you can still enjoy a steady income.
Short-term vacation rentals are a booming business, and if you use a vacation rental agency, it alleviates much of the work involved. What’s more, Turnkey notes that Phoenix offers so much to do that in the right location it can really pay off for homeowners. As an example, visitors flocking to the Phoenix Zoo or the Papago Golf Course might stay in Papago Park, so if you have a house there, it could be an ideal solution. Homes in the Encanto-Palmcroft Historic District provide easy access to historic architecture and the Arizona State Fair. Hikers might book a house in the Arcadia district.
There are numerous possibilities. If your home is located near any of the area’s many attractions, a vacation rental can be a money-making proposition.
Hit the Housing Market
For obvious reasons, a popular option for many seniors is to sell the home. Assisted living is an expensive proposition, averaging over $4,000 per month per Senior Housing News. You can calculate how much your home is worth on the market and compare that number with your home’s equity to find out how much you might make by selling. Keep in mind you also shed the other expenses involved with homeownership, like property taxes, insurance, and utilities.
A Gift that Keeps Giving?
Lastly, sometimes seniors want to gift their home to a family member. The Law Dictionary explains there are a few ways to do this. You might do a special warranty deed transfer, protecting the recipient from any claims made on the property. A general warranty deed transfer similarly protects the recipient and the senior at the same time. A quitclaim deed transfer is the easiest version, but it provides the least protection.
Of course, a senior can allow the house to remain empty and retain ownership as well. Unfortunately, this doesn’t alleviate the financial responsibilities of homeownership. It also leaves the home vulnerable to vandalism and theft.
As you mull over your decision and various details, do keep in mind that there are tax and Medicaid implications involved with how you handle large assets. It’s often advisable to talk with an attorney, particularly if you and/or one of your loved ones stand to profit from the proposition.Will the old home be a money maker or a gift? Moving is always a stressful time, and figuring out the details of the house being left behind can be pretty tough. Seniors should think first about their own financial security and then go from there.