It's time for a move to an assisted living community, now what should you do with the family home? Keep or sell, where do you even start? There are a few factors that will determine the answer and we discuss those on this episode.
Good Reasons to Keep the House After a Move to Senior Care
If someone in the family has an emotional attachment to the home than you'll need to think through the details that will determine if keeping the home makes sense. Here are some things to think about;
It makes sense to keep it as an investment.
The location of the home is a major factor in it's investment potential. In some markets selling could mean losing more money than you may gain by hanging on to it. If the market the home is in is increasing in value then keeping it might be a good investment. It's important to consult a realtor and a CPA/Financial planner who can help you make sense of the financial factors. Turning the family home into a rental property can help fund our loved ones care. It can also offset the cost of care provided by a family member. A investment property can enable you to make money while you wait to sell.
A family member wants to live there.
If a child or grandchild wants to inherit the home then there may be no need to sell it. It can stay in the family and continue to be used. Your parents can know the house they loved is still in loving hands (and maybe visit sometimes) and the family will know that there's someone to take care of the maintenance and associated costs of keeping the home.
You have a good use for it.
Keeping the family home for another family member or turning it into an investment property are both good options for your parents home but there could be a third option. If the home is in a central meeting location it may make sense to keep it as a family for family get-togethers. Later you can decide to allow a grandchild or great-grandchild to inherit the home or you can turn it in to an investment property when the time is right.
Important Factors If You Keep The Home
Whatever you decide to do, it's probably wise to consult a financial planner and a realtor. Regardless of what you decide to do it's likely you'll need an appraisal to get the current home value. After you learn that, there are other factors to consider.
Covering monthly costs.
Even if the mortgage is paid off there are still maintenance issues, on goin upkeep and taxes and insurance that must be paid. You'll have to decide as a family how those costs will be covered. Will all the costs be covered by the rental income if you decide to make it an investment property? If you keep it as a family meeting spot, who will be in charge of maintaining the home and how those costs will be covered.
Finding a tenant.
Since there is an emotional attachment to the home it's in everyones best interest to hire a property manger. A good one will be able to find a tenant and coordinate on-going and emergency maintenance with little fuss on your part. If a family member does the managing there will likely be time involved that should be compensated in some form.
Keeping up with on-going maintenance.
If you don't hire a property manager you will have to have a family discussion about who will coordinate maintenance issues, manage gardening contractors, etc. This is not always just a few hours a month. Some maintenance issues may require working with a contractor or handyman. A good property manager will have a ready supply of people to call to handle all the issues that come up with homes.
To Keep or Sell After a Move to Senior Care
For some families, it will make better financial sense to sell the home regardless of emotional attachments. Here are just a few reasons that selling may make more sense.
Keeping it is too much work & cost.
A paid off mortgage is great but there are still regular maintenance, “emergency” maintenance issues, taxes and insurance that must be kept up with.