If your parent owns a house, one of the decisions you need to make now is whether or not to hang on to the house or go ahead and sell it after a move to senior care. Learn more about both options and their advantages and disadvantages.
Good Reasons to Keep the House After a Move to Senior Care
Chances are, someone in the family has an emotional connection to your parent?s house. If letting go of it is a difficult emotional decision for any of you, then you?ll want to think through whether or not keeping it makes sense. Sentimental reasons alone aren?t always enough to go off of, but there may be other good reasons that make it worth it.
It makes sense to keep as a real estate investment. Depending on where you live, selling could mean losing more money than you would gain by hanging onto the house for a while longer. If you know the real estate market where your parent lived is on an upward trajectory, then keeping the house may be a really smart financial decision. Even if someone from the family won?t be moving in, you could rent it out and make money on it while you wait until the right time to sell.
Someone wants to live there. If one of the children or grandchildren wants to inherit the house, then there may be no need to sell it. It can stay in the family and continue to be used. Your parent can know the house they loved is still in loving hands (and visit it sometimes) and you can all know there?s someone there to take care of maintenance and the costs associated with ownership.
You have a good use for it. Making money and making into a home for another family member are both good uses for your parent?s old house, but there may be other less obvious reasons that keeping it makes sense for your family. This was the case for my mom, Debra Hicks, and her siblings when my grandmother moved to memory care. ?We kept the house because it was a great meeting place for all of us to get together,? she told me. ?It?s in a central location with enough space for our large family to gather for celebrations and meals.? Even with no one living there full time, the house serves a good purpose several times a year when the children, grandchildren and now great-grandchildren of the original owners join together there.
Important Factors to Consider If You Decide to Keep the House
Whatever reasons have you leaning toward keeping the house, it?s not a decision you should make lightly. Make sure you?re prepared to figure out all the details that go with that decision:
Covering ongoing costs. Even if the home is entirely paid off, this includes the cost of ongoing fixes and maintenance, home insurance and taxes.
Deciding on financial details. This can be the tricky part for a lot of families. You have to all figure out how to pay for the expenses involved in keeping the house and how to use any profits from renting it out, if applicable. If your family is prone to disagreements, hanging onto the house may cause more trouble than it?s worth.
Figuring out who will live there (if anyone). If you?ll be renting it out, you have to do the work for finding good renters, which may take some time. If someone in the family wants to move in, you just have to be sure everyone in the family is okay with the arrangement. If you?re leaving it empty, you need to make sure somebody goes by frequently to check on things and deal with the aforementioned ongoing maintenance.
Keeping up with ongoing maintenance. Someone will need to take on the responsibility of making sure the house stays in good condition. That means fixing things that break, keeping the yard maintained, etc. It?s a lot of work and can especially be hard to stay on top of if someone isn?t living in the home.
Good Reasons to Sell the House After a Move to Senior Care
Whether you feel an emotional connection to your parent?s home or not, for some families, there will be more reasons to sell it than there will be to hang onto it:
Keeping it would cost too much (and require too much work). As we discussed in the earlier section, keeping the house will mean becoming responsible for a number of associated costs ? from home insurance and taxes to various repairs. This especially becomes an issue if no one is living there says Ann Cohen, ?As a Realtor, I see vacant homes often fall prey to unexpected issues ? frozen pipes, leaky pipes, roof leaks and so on. Homes are meant to have people living in them! Unused appliances and pipes develop compromised seals.?
Nobody lives close to it. This was the case for the author Carol Amos. ?When our mother moved to assisted living, my brothers and I agreed that we should sell my mother?s house. My two brothers and I lived outside of the area in different parts of the country,? she explained. Taking care of the house ? either while it stands empty or as the landlord to renters ? is a lot harder if you?re not there in the same city or even state. If your parent moves into a senior living community close to one of the kids, then there?s nothing keeping any of you tied to the city their home was in. Going back just to deal with house stuff will likely feel more like an annoyance than anything else.
You want the money from it to pay for senior care. Staying in a senior care community can be expensive. If the value of your parent?s home is high enough, selling the house may seem like the most practical solution to getting the money you need to pay for the home. Selling now could pay off in how you?re taxed on what you make. As Sissy Lapin of Listing Door explains, ?There are no capital gains taxes for a $250,000 gain if you are single and $500,000 if you are married.? As long as your parent had owned the home for at least the last two years and treated it as their primary residence, that is. In some cases, selling the house will be your smartest financial decision.
If no one in your family feels up to the task of dealing with the maintenance and costs associated with keeping the house, then selling it just makes sense.
Important Factors to Consider if You Decide to Sell the House
If you?re leaning toward selling the home, there are a few important factors you need to think about before making a definite decision:
The condition of the home. If it?s an older house and especially if your parent hasn?t been doing much work on the upkeep, then the house may not be in good condition to sell now. You?ll need to consider the fixes and upgrades that need to be made to attract a buyer, or decide if you?re willing to make less on the sale in order to forego the work.
The local real estate market. Before you decide to sell, talk to a local real estate agent. You need to find out what the home is worth now and what the expectations are for what the market will do in the coming years. If you?re hoping to use the sale to pay for assisted living, then you need to understand what you can expect to make for the house before you can be sure the math will work.
The work of selling. While a good real estate agent can take a lot of work off your plate, you?ll still need to clear your parent?s things out of the house, make the recommended upgrades and do paperwork. Someone in the family will need to be prepared to take those tasks on.
Your parent?s readiness to sell. At the end of the day, the home still belongs to your mom or dad. According to Dr. Ann Meyerson, Realtor and Transition Counselor, ?Senior parents may also need a little psychological room to give up ?their home? in stages and renting out the property can be a temporary solution.?If they?re not ready to give up the house yet, you should try your best to respect that. Although if you quite simply can?t afford to hang onto it after they move, you may not have a choice.
Deciding whether to keep your parent?s house or sell is ultimately a personal decision that depends on your particular circumstances and feelings and those of any other family members that have a stake in the decision.