Downsizing is convenient for older adults who want to enjoy their retirement without spending extra time, effort, and money on home upkeep. When switching to a smaller property, you have to decide what to do with your current house: You can sell it, rent it out, or keep it in the family. Which option is right for you? Consider the following financial and practical aspects when deciding.
Financial considerations
If you sell your house, you may get a lump sum payment. To get an idea of what you can expect to receive, compare your home to other listings on the market. This will vary significantly depending on where you live, and Bend is proving to be somewhat competitive. For example, in Bend, the average listing price of homes over the last month was around $485,000 with 1% of homes selling below list price. With this information like this, you can determine whether a sale will cover the recommended 20% down payment on a new home or the monthly fees of assisted living.
If the market in your area isn’t great right now, you might want to hold off on selling and simply rent out the property. This can provide a steady income stream, which you may be grateful for down the line. Money is a major concern among retired persons, with more than 60% of Americans worried that they will run out of funds after they stop working. If you want to stay in your home and have the extra room, you can even look for a senior roommate using a platform like Senior Homeshares. You will collect some extra money without having to move.
If you opt to keep your home in the family, make sure this is financially feasible. You can rent out the home to your children, for example. Alternatively, if you were planning to leave the property to your kids, you can transfer it to them now. Designating it in their name, for instance as a part of a living trust, also avoids the probate process that comes with leaving assets in a will. While keeping the home in the family may not be the most lucrative option, many people find this to be an emotionally rewarding route.
Practical considerations
Once you have an idea of what’s possible financially, you can assess the practical aspects that are relevant to downsizing. If you intend to sell or rent your house and move into a new property, where should it be located? Maybe you want to move closer to your kids so you can spend more time with your grandchildren, for example. Again, get an idea of housing prices in areas where you’re interested in moving.
When downsizing to another house, look for senior-friendly properties. These will ideally have only one level. If you need mobility aids like a wheelchair in the future, stairs will also prove inconvenient. Refer to this Aging In Place guide of how to create a senior-friendly property when shopping around. Suggestions on what to search for include no-step thresholds and hallways wide enough to accommodate wheelchairs.
When downsizing you might alternatively opt to move to an assisted living facility. Here, you receive regular assistance with everyday tasks including cooking and cleaning. Assisted living can be a wonderful option if you would like support in these areas. It also provides practical benefits in terms of social life: You will be surrounded by other seniors and have a built-in community at your fingertips, which can help combat the loneliness that comes with isolation in seniors. This may be especially helpful following the death of a spouse.
The bottom line: Downsizing is unique for every person
As you go through the above financial and practical considerations when deciding what to do with your home, keep in mind downsizing is about improving your life. Every person’s journey is unique. Some people might find it totally unfathomable to rent or sell the old family home to strangers, while others won’t be as emotionally attached to the property. Focus on what will make you happy and follow that path.
Article courtesy of Jim Vogel