Moving yourself or a relative into assisted living involves making a number of big decisions. Included in these decisions is what to do with your major assets, especially your home. You want to make the right choice, but there are so many options to consider and factors that influence whether you should keep the home vacant, gift it to family, sell it, or rent it to tenants. Marin Real Estate explores each option to help make this decision a little easier for you.
Assisted Living Facilities vs. Nursing Homes
First you need to understand the differences between assisted living and staying in a nursing home. You may need to move to a skilled nursing facility if you require 24/7 care for a medical issue. Look online to find detailed facility reports, pricing info, payment options, and reviews from other families for nursing homes in your area.
Selling Your Home Outright
For seniors who need money to pay for the cost of assisted living, selling the home outright may be the best solution. FamilyAssets notes that this is an incredibly common way for seniors to cover their long-term care costs. Even if you don’t need the money right away, consider selling now instead of letting your home sit empty. You’re moving anyway, so this is a good time to sort through all of your belongings and get your home in shape for a sale. Plus, it’s better to start the sale process before you need the money from the sale; you never know how long it will take to find a buyer.
Get in touch with a local real estate agent who can help you determine whether or not now is a good time to list your home for sale. You can also use resources online to calculate your estimated home sale proceeds based on your estimated sale price, outstanding mortgage balance, and the typical costs associated with selling a home in your area.
Using a Reverse Mortgage
Selling may not be an option if one spouse wants to remain in the home. If you still need to free up resources to cover the costs of long-term care but selling doesn’t make sense, a reverse mortgage may be your best bet. Just keep in mind that your reverse mortgage loan will come due when the last borrower moves out of the home, so you may need to sell your home in the future if you plan on moving into assisted living at some point. You will not be able to get a reverse mortgage if both you and your spouse will be moving into assisted living together.
Become a Landlord
Many seniors choose to hold onto their homes and rent them out to tenants instead of selling them outright. This is a great way to maintain your home equity while still accessing money to cover some of your assisted living costs. However, your long-term care may cost more than you can earn through renting out your home, so you should be prepared to cover the remaining costs with your personal savings. Also, keep in mind that being a landlord can be time-consuming while hiring a property manager will cut into your rental profits
If you decide to rent out your home, take the time to find quality tenants who will take good care of your property. Be sure to collect a security deposit, and use rental applications to collect important information about prospective tenants so you can conduct background checks. Be sure to research the applicant’s employment, credit history, criminal records, and rental history.
Leaving the Home Vacant
Leaving your home unoccupied is the least desirable option, even if you don’t need the money from selling or renting out your property right now. Unoccupied homes cost money and require regular upkeep. Housewise points out that they also face many risks and dangers, including vandalism, theft, water damage, fire, and squatters. If you want to hold onto your home so you can pass it down to family in your will, consider renting it out or having a family member stay there.
It can be tough to decide what to do with your home when you move into assisted living. Whatever you do, try not to put off this decision for too long. Handling complicated matters, like selling your home, is best done long before you find yourself in a bind. Sit down and evaluate your options carefully so you can arrive at a decision that makes sense for your situation.
The Narodny Team of Marin Real Estate brings more than 60 years of combined experience to their clients and they actively train and mentor a large part of the Marin Realtor population. Contact us today for more information! (415) 847-0309 or (415) 265-7488