Transitioning to Assisted Living: What to Do with the Family Home
By: Andrea Needham
Moving into an assisted living facility is a tough decision, but deciding what to do with the vacant family home can be even more challenging. Although your home is likely your most valuable possession, sentimentality can make it difficult to part with. Do you sell it? Rent it out? Pass it down to a family member? As you weigh your options, there are important things to consider.
Choosing the Right Assisted Living Facility
Before you decide what to do with your home, take some time to explore different assisted living facilities. Get an idea of the costs you can expect after moving out. Information like this will help you decide if you need to rent out or sell your home to fund your new care expenses. While cost is important, don’t forget other key factors — like atmosphere and amenities — as you tour different facilities. Remember that assisted living facilities are designed to offer help with daily living tasks while allowing you to maintain your independence.
Selling Your Home
Selling your home is one of the things you can do with it after moving out. If you need your home equity to pay for care, this may be an attractive option. Selling could be smart if the real estate market is strong in your location. You’ll get a lump sum of money to fund your living expenses going forward, and you won’t have to worry about the upkeep of your home. Of course, selling also means that you won’t be able to leave your property to your loved ones.
Before selling your home, get some financial and real estate advice. You can start by using a home-sale-proceeds calculator to get an estimate on how much your home may sell for. Remember that selling a home can cost a lot of money — maintenance and staging expenses, real estate agent fees, and closing costs can really add up. According to Opendoor, the costs of selling a home can eat up around 10 percent of your sale price! So, before you start this process, make sure that selling your home is a smart financial decision.
Renting Out Your Home
If you’re too attached to your home to say goodbye, renting it out is a good way to generate income, whether you’re renting it long or short term. You’ll receive a set amount of money from your renters every month, which can help you cover your care expenses — as long as you can keep your home occupied, that is. The downside to renting out your home is that it can be a lot of work. As a landlord, you will be responsible for finding tenants, solving maintenance issues, and ensuring that you get paid on time. Remember that you will also have to adhere to local rules regarding zoning and taxing.
You can avoid all this work by hiring a property manager to help out. This will cut into your rental income, but you’ll have peace of mind knowing that your property is being taken care of and tenant issues handled. A property management company can do more than just handle maintenance. They can screen tenants, and some even offer online booking for guests and tenants.
Leaving Your Home to a Family Member
If you don’t need extra money to pay for your stay in assisted living, selling or renting out your home may not be worth the hassle. Instead, you may want to leave it in the care of a family member. Having someone live in your home will prevent issues like leaky roofs, burst pipes, vandalism, and squatters — just a few of the many risks of leaving a home unoccupied. Also, NOLO.com points out that most home insurance policies will not cover damage that occurs after a house has been vacant for over 30 days, so you might have to pay additional premiums if you have no other option than to leave it unoccupied.
Are you planning on leaving your home to your children after you die? Consider transferring your property to your family members as an early inheritance. This way, your loved ones can factor in your opinion as they decide what to do with the home, and they won’t have to go through the lengthy probate process. Gifting the family home to your loved ones while you’re still alive also comes with some tax benefits!
Whatever you decide to do with your home, it’s important to prepare emotionally for this big move. The transition into an assisted living community can be complicated, and high levels of stress can make it more challenging. If possible, put off big decisions about your home until you get settled into your new living environment.