Ticket to a New Life
No doubt, the best possible way to get the most ROI on your property is by selling it. It could even be as straightforward as selling your old home and using the proceeds to buy a smaller and more accessible one or move into an assisted living facility, as well as have enough left over to cover your care and living costs.
Of course, this is an ideal world scenario, and reality requires more due diligence and consideration. At the most basic level, you will need to get to know the real estate market and find out what your home will realistically go for, as well as how much your potential new residence will set you back. Needless to say, it’s crucial to have a budget and really stick to it, so you can stay on track and choose a home you can afford.
At the same time that you want to take care of yourself during your golden years, you may also want to continue looking after your family. This is why many seniors choose to pass on the family home to their children. The sentiment is also another reason: The family home should be kept in the family. Lastly, there’s also the opportunity to relieve yourself of a sizeable tax burden.
Despite the upsides, it does come with caveats, many of which are not at all judicious. For one thing, gifting your home may make you ineligible for benefits such as Medicaid. For another, you may inadvertently pass on a number of tax consequences to your kids. Luckily, there are ways to avoid the tax implications, so make sure to do your research before going down this route.
Source of Income
Your home is probably the most significant investment you’ve made during your life, so it does make sense to get your returns at this point in time when you are in need of them. A great way to do so is to rent it out, making it a steady source of income that you can rely on to cover your healthcare and living costs, as well as any expenses associated with the house, such as property taxes and mortgage payments. This also gives your property room to appreciate further, as well, which you can choose to leverage later.
However, the downside is that this comes with a great deal of responsibility, which you may not be up for at this stage in your life. This includes vetting and dealing with tenants, concerning yourself with maintenance, and keeping up with payments.
An even bigger concern is being sure that what you’re earning from the rental and/or your fixed income is enough for the cost of moving into an adequate and senior-accessible home for you. So, not only do you have to consider your care and living expenses, but you also have to think about down payments and the like. It’s a good idea, therefore, to know what you’re up against as a whole, as well as what’s expected of you, before you choose this option.
At the end of the day, living your twilight years comfortably and safely relies on the smart decisions that you make moving forward. Downsizing your home may just be the first step, but it’s the most important one you’re likely to make.
Thanks to Jim Vogel at Elderaction.org. He can be reached at: firstname.lastname@example.org
Hi, I am Summer, real estate agent in NE Iowa. This blog is about life, of which Real Estate is a part of. Happy reading!