The journey of life is an exciting one that is part intention and planning and part accident. When you reach that chapter of your life that is most often planned where you are considering retirement, there are a number of things to account for... income/savings, family distribution, assets, etc. Jim Vogel has provided this guest blog to help you when thinking through one of your biggest assets, your home and how to handle your home when you are retiring somewhere else.
Deciding what to do with a senior’s home when they can no longer live alone is never easy. If you’re the senior in question, it is often a heart-wrenching decision. On one hand, you know you need to downsize, but on the other, you are comfortable right where you are. Unfortunately, some medical conditions can make it impossible to continue to live alone safely. At some point, you might have to decide to move to an assisted living apartment or live with an adult child.
I Don’t Want to Sell
Selling your home is not an easy choice. If you have decided against signing over the deed, you can still use your property, but instead of as a residence, you can use it as a source of income. As long as you do not have an HOA or local restrictions that prohibit you from using your home as a rental, you can lease your property for a monthly fee. This not only ensures that you continue to gain equity but it can also help cover the cost of assisted living. In Naples, this comes out to about $42,000 per year, or $3,500 every month.
Keep in mind that an assisted living community is essentially an apartment building that offers older adults help with things like taking medication and meal prep, but it also leaves plenty of room for independence. Before settling on your new home, however, make sure to tour many different local options so that you get the most for your money. Keep in mind that should you change your mind and wish to move back home later, it can take several weeks to months before your renter vacates your primary residence.
If you do not want to worry about regaining occupancy, another option is to keep the home in the family. This can be tricky, however, if you have multiple children that each have different ideas about how your estate should be handled. It is wise in this scenario to appoint someone with conservatorship rights. According to attorney Deborah Malkin, a probate conservatorship is one reserved for individuals who need help because of aging, an accident, or illness. In Florida, conservators are often called fiduciaries.
Say Goodbye, Mortgage
Selling your home to fund retirement is another fantastic option, especially if you can get enough out of it to completely pay for a smaller home or condo. Even if you think you can pay for a new home outright, start on the lower end of what you can realistically afford. You’ll need to take into account how much money you have incoming each month and how much you expect to spend on things like electricity, recreation, and travel. It might make more sense to keep some of the proceeds from your home sale in the bank and have a small monthly house payment. Whatever you choose, do take the time to create a budget so you do not get sidetracked by homes outside of your affordability range.
Before you sell, it’s important to get your property ready for the market. Unfortunately, if you have lived there for many years, it may be considered outdated; wood paneling and tons of carpet are two things listed on BobVilla.com as features that date a home. A few updates, which your Naples real estate expert can point out, will help you get the most out of your investment.
There’s no easy answer to the question of what you should do with your home when it’s time to downsize or move to assisted living. However, you do have options, whether you want to keep it in the family or get rid of it completely. Remember that the choice is yours, but make sure that whatever you decide is in your best financial interest.