How to Navigate a Move to Assisted Living When You Own a Home

The decision to move into assisted living is not one you have taken lightly. This means that exploring your options for what to do with your home is also a priority. There are financial pros and cons to every scenario, so you must look at each option critically.

Choosing to Sell

Parting with your home may be difficult emotionally, but the proceeds might solve any financial problems you have and set you up comfortably for the future.

Financial Pros

Many older adults choose to sell their homes to pay for assisted living. As US News explains, Medicare does not pay for assisted living facilities. They do, however, finance short-term stays in nursing homes for rehabilitation, if necessary. Therefore, selling your house might be a way to afford the long-term care you need. A sale also means you can put cash in the bank or invest it strategically. You might see better returns on a predictable investment such as stock dividends and corporate bonds over renting or keeping your home.

Financial Cons

If you owe money on your mortgage, selling may not be the best plan. This is especially true if you have already refinanced the property, as you might have negative equity and need to postpone selling to break even. A home sale can also cost you money — especially if the house requires repairs. Real estate agents receive up to 6 percent of the sale price in commissions, and you may need to invest in inspections, staging costs, and more. In total, you may miss out on up to $23,000 off your net proceeds.

Opting to Rent

The decision to rent your property is not a permanent one, making it less intimidating than saying goodbye. Here’s what you need to consider.

Financial Pros

If a lump sum from your home’s sale isn’t a good fit, monthly rental amounts may help boost your income. As the National Center for Assisted Living explains, the cost of residing in an assisted living community runs an average of $4,000 per month across the United States. In comparison, monthly rent averages about $1,400 per month. Together with your Social Security and retirement income, your home’s rent could earn enough to offset expenses.

Financial Cons

Although average rental prices are rising across the country, it doesn’t mean your area is experiencing the same trend. Comparing rental listings can provide insight on what amount you can expect to receive when moving a renter in — and it might not be enough to cover your expenses. Renting may also incur some unexpected costs. You might need to clean or repair your property after renters move out, fix issues while people are living there, or pay a rental management company to handle landlord duties for you. And, as House Logic notes, buying rental property insurance is also a smart — yet pricey — step.

Having Family Help Out

For seniors whose families can step in and help them during this time of their lives, letting a home remain within the family can be an excellent choice.

Financial Pros

For family members who are willing and able to pay rent, your mortgage may be covered if a family member is living there. Plus, they may invest in repairs and improvements out of pocket, saving you the stress and cost of handling maintenance.

Financial Cons

Letting family live in your home for free is not ideal for your finances. However, even if loved ones cover your mortgage costs, it doesn’t mean you will reap the benefits. Charging less than market value for your home (read: free) means you likely can’t claim any tax deductions for landlords while your family lives in your home.

Staging Helps Hasten Sales

If you do decide to sell, know that staging your home can help it sell faster. To take advantage of this trend, start by decluttering each room, including storage areas where visitors will look. Make sure to deep clean, eliminate odors, and take care of repairs that have been waiting. Finally, rearrange or remove furniture to fit the space in a visually appealing way.

Preparing to move out of your home is often stressful. However, by looking into each of your options, you can choose what’s best for your life and your wallet.

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