As we age, there will come a time when we have to decide on a living situation that best suits our changing needs. Now that you’ve made the decision to move into an assisted living facility, you will need to make a decision about your current home. Let’s look at your options.
Giving the House to Your Children
You might look at this option if your children have not yet acquired a home of their own. According to Zacks, seniors are able to give their property to their children by changing the name on the deed or creating a new deed. By changing the name on the home’s deed, you would be declaring that the property is under new ownership and you are no longer responsible for it. If you choose to create a new deed by amending the ownership to one of joint tenancy, your children would have equal rights to the property, but the property could be seized by the relevant authorities to cover their debts. There are some possible tax and Medicare ramifications for this option, such as incurring a gift tax or losing certain Medicaid eligibility benefits. You should consult with a lawyer when considering this path.
Renting the Property
You could create a revenue stream if you rent your home. It’s best to make that decision after consider these points laid out by Money Crashers. If you maintain ownership of the property, you will still be responsible for the mortgage payments and property taxes. As a landlord, you will also have to pay a landlord insurance and conduct timely maintenance of the property. Since you’ll be in an assisted living facility, you can’t be at the property and you’ll need someone’s assistance with rent collection and handling tenants. You’ll need a property manager to carry out these duties. Your rental income will also be taxed in line with the relevant regulations. There is, however, the potential to make money with a rental property as long as the rent is greater than the combined expenses. Should you decide to rent, it’s important to ensure you’re taking steps to protect yourself and your property.
Selling the Property
In this article for Investopedia, the pros and cons of selling a home are discussed. For example, while you could free up the money you’d use to pay the mortgage as well as reaping some tax advantages, by selling, you’ll be surrendering your largest asset and potential rental income. To successfully sell a home, you must cover all the basics such as determining the value of your home and hiring the right realtor. With this information, you’ll be able to see if selling your home will yield a profit or a loss. If all goes well, the proceeds earned from the sale can be used to fund your assisted living costs or invested after consulting with a financial advisor.
Preparing the Home
Whether you have decided to gift, rent, or sell your home, you will need to clean it up. This is perhaps most important when renting or selling, as the home needs to appeal to your potential tenants or buyers. There are a number of things that you’ll need to address before opening up the house for viewing, including removing personal items and decluttering the home. If the items can’t be donated or recycled, consider renting a storage area for them. You will need to thoroughly clean the home, so be prepared to enlist help or hire a professional. If the house needs any repairs, such as a leaky roof, leaking pipes, or replacing wood damaged by termites, these must be a priority. Finally, staging the home by highlighting its best features and using natural lighting where possible will put the finishing touches on your home.
As the homeowner and the one who will have to live with the consequences of what happens to your home, it’s important that you choose the option that works best for you. Your situation, as well as potential changes in your health, should also be considered when making the final call.