Sell, Rent or Pass Down: What To Do With Your Home After Downsizing
Have you come to the conclusion you have more space than you need? Whether it’s to help with the feeling of an empty nest or simply because you’re tired of maintaining a large home, the act of downsizing can feel overwhelming. Choosing a place to start and getting the right help along the way can go a long way towards reducing stress and making it a good experience.
The first step, though, is figuring out what to do with your home: sell, rent, or keep it in the family?
Selling your home is the easiest way to guarantee that the house is no longer your problem. Demand for housing is high and is expected to stay that way, and there is a quick turnaround; many homes are sold in just around two months.
Even if you are still paying off your mortgage, moving to a smaller, less expensive house may be an excellent option since it could lower your payments significantly. Per Open Door, having been in your home for at least five years should give you enough equity to meaningfully sell the home and get moving to your next great home.
Once you’ve decided it’s time to move on, the best advice is to reduce your stress on moving day. Shopping for a good moving company can be key; moving usually costs between $585 and $1,606, so you want to ensure your money is well-spent. Do some shopping around online to find reliable, reputable moving companies so you don’t get swindled.
Selling your home may not net you as much as you think it will. In the course of downsizing, Motley Fool says that seniors typically only get a savings of $20,000 since there is such a large market for smaller homes.
Another option that may be more profitable is renting out your property instead. While you will still be responsible for housing repairs and general maintenance, you will have the freedom of moving to a new location with a guaranteed monthly income. To see if this is a good fit for you, make some calculations to see if this will be an avenue for creating wealth. Just remember: if you haven’t paid off your house yet, you will have to pay two mortgages.
PASSING DOWN THE HOUSE
It’s always an option to keep the house in the family, especially if the mortgage is long-paid. Some seniors consider giving their house to their children, but Attorney John Roberts notes it’s a risky proposition.
Depending on how much the value of the home has changed since it was originally bought, the recipients may get stuck with an outsized tax bill if and when they go to sell the home themselves. It also has the potential to slow down Medicaid if you give sizeable gifts within five years of applying for benefits.
If your heart is set on passing down your house, be sure to get advice on how to do it without leaving yourself — or your children — out to dry. For your reference, visiting an estate attorney typically runs $250 to $310 per hour.
Whatever you decide, be sure to practice self-care during the move! Think about how things will be unboxed, and fill the containers accordingly. It’s not simply a matter of packing room by room, but how soon after moving in that you’ll need the item. Packing your toothbrushes, medication, pajamas, coffee maker, and other necessities together or a few well-labeled boxes will make getting into the new space that much more pleasant. It’s easier to tackle all of the other unpacking duties when you have your caffeine and favorite socks.
Downsizing is a big decision, and what to do with your old abode is no small part of it. Think through your options carefully. When the time comes to move, take care of yourself, and thanks to your thorough preparation you can rest in knowing that you made a great choice.