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Planning what to do with your assets is a critical part of moving into an assisted living facility. This will involve deciding whether to sell your primary residence. There are several good reasons to keep your house, so it’s important to consider the pros and cons carefully. Fortunately, selling isn’t your only option. Here are a few different things you can do with your home when it’s time to move out.
Rent It Out
Renting out your home after moving into an assisted living community is a great way to make some extra money. You get to keep the home in the family while receiving monthly income to fund your care.
Renting to tenants on a one-year lease isn’t the only way to do this. According to Mashvisor, there are four other ways to rent out a property—as corporate housing, senior co-housing, low-income housing, or a vacation home. These options allow you to generate higher income from your property or guarantee a steady cash flow.
Whichever way you decide to rent your home, consider hiring a property manager. Renting out a property requires a lot of hands-on work, from finding tenants to coordinating maintenance. A good property management company will keep you and your loved ones in the loop about your property and offer 24/7 support for both you and your renters/guests. Some management companies even offer online booking and take care of hiring housekeeping services. That way, you can enjoy the extra cash from renting out your home without being too involved.
Unfortunately, there are some disadvantages to renting out your home. First of all, you may not be able to charge high enough rent to offset the cost of your assisted living care. It’s also possible that you may end up with bad tenants who cause damage to your property or do not pay rent on time, leaving you scrambling for the funds to cover your expenses. It’s important to consider these risks before deciding to rent out your home. If you decide to go this route, take some advice from Military.com and protect your property with insurance and a lease reviewed by a lawyer.
Another option is to sell your house. This is a good idea if keeping your home would be too expensive or labor-intensive. Selling your home will give you access to a large amount of money to fund your care, but it may create a substantial tax burden. There are also various fees involved in selling a home, such as real estate agent commission and closing costs.
If you’re leaning toward selling, make sure you consider the condition of the home, the local real estate market, and the work involved in selling. Remember, you may have to make a few upgrades if your home is on the older side. Secure a trusted real estate agent so you can get the best value for your home. The Balance cautions against choosing a listing agent based on their commission or their list price for your home. Instead, look for someone with the experience and education to back up their claims.
Have a Family Member Care for It
You may not have to sell or rent out your home if you have a family member who wants to move in. This way, you can be comforted knowing that your home is in the care of someone you trust. Having someone in the home will prevent unexpected issues like roof leaks or basement mold from going undetected and becoming large, expensive problems to fix.
This option may only work for people who have other ways to fund their assisted living care. If you need the money from your home, you may consider charging your family rent for the use of your home. Just make sure you understand the tax rules for renting out your home to family members.
Moving into an assisted living facility is a huge decision in and of itself. Once you’ve worked out the finer details of this move, deciding what to do with your home can be completely overwhelming. If possible, take some time to consider your options carefully and ask your trusted family members for their thoughts. Careful planning will help you come up with the best possible solution for your circumstances.
At Real Estate Experts we sell homes and manage rental properties. Contact Real Estate Experts and we can advise you of the pros and cons and provide you with a comparative market analysis for selling your home and a rental analysis as well.
What To Do With Your Home If You Are Downsizing
As you grow older, downsizing to a smaller, more manageable home seems like an increasingly attractive option. However, that doesn’t mean it isn’t a complicated process. Before you even start dealing with the move, you need to decide what you are going to do with your existing family home. In this article, we will go over a few of the basic things to keep in mind.
Selling the House
This is perhaps the most obvious solution, and the one most people choose. After all, most people will need the cash from a home sale in order to be able to afford to buy a new place. However, it’s important to actually understand the local market before deciding.
According to the Triangle Multiple Listing Service, the average home in Chapel Hill sells for $400,000, and homes take an average of 62 days to sell. This is because Chapel Hill is not a particularly competitive market. What this means is that you cannot be guaranteed a quick sale.
This becomes especially relevant if you are selling a big family home. According to Business Insider, the large multi-bedroom homes owned by boomers are becoming harder to sell to the younger generation. In other words, your big house may be hard to sell, and you are less likely to make as much profit from downsizing.
There is also the matter of downsizing your possessions. Selling the house means you likely have to get rid of many items and furniture. You need to be organized and have a plan to make sure you don’t get overwhelmed. My Move recommends starting early and starting small, prioritizing the rooms you won’t have in your new house (like an attic or home office).
Renting Out the House
Renting out your house is a great option if you plan to sell the house someday but would rather hold onto it for now. Rent does not bring in a big cash sum, but it can provide a regular, ongoing source of income. This can be more convenient in terms of cash flow for someone on a fixed retirement income.
The average rent for a three-bedroom apartment in Chapel Hill is $1,875, and this is likely to be higher for a house. If you are looking to rent a one-bedroom apartment in the city center (average rent $1,068.75), you could be looking at a net monthly profit.
If, on the other hand, you are buying your new home, things can be a bit more complicated. For seniors, Bankrate recommends looking at 10-year or 15-year mortgages, which will allow you to pay off the smaller home faster. Using the SmartAsset calculator, we can see that a 15-year mortgage on a $400,000 home, with a $50,000 down payment, would cost almost $3,000 a month. If you wanted to pay off your mortgage with your rent income, your down payment would have to be as big as $200,000.
Of course, these are all approximate figures, which will vary pretty significantly. It is worth noting that a senior could get a traditional 30-year mortgage, which would be a lot easier to finance using rent income. However, experts do tend to recommend seniors minimize debt in retirement, and this may not be the most convenient option.
If you are considering renting your home, Real Estate Experts property management group will take care of your all important investment — your home. If you want to learn about property managers and what we do and what Real Estate Experts does to protect your home, watch our video about What Property managers Do and visit our web site.
Keeping It in the Family
This is obviously the best option if there is someone in the family who actively wants the home. There are several options here, from giving the house as a gift to passing on the mortgage to your family member. Each has its own tax implications, so do plenty of research before deciding. For instance, if you try to sell your house to a relative for a big discount, the IRS will still count this as a gift, and the gift tax will apply.
Deciding what to do with a family home when downsizing is never an easy choice. There are a lot of complex financial factors but also significant emotional and practical ones. For this reason, you need to give yourself plenty of time to consider all these carefully and discuss them with your family if needed. In other words: When it comes to downsizing, don’t rush things!
Real Estate Experts can help you evaluate your home and help you make the decision about selling or renting. The foundation of our business is that is It All About You. Our goal is to help you make the best decision that meets your family goals. Contact us anytime!
Plans for a new senior living community in Cary, NC are underway, with construction set to begin this summer. “Paraclete Professional Park” will feature a 475,000-square-foot “life care” community, including 240 independent living units and 130 assisted living units, office space, and possibly a 150-room hotel. The community, which will be located on Kildaire Farm Road across from WakeMed Cary Hospital, was proposed by Mangum Development, LLC.
Photo courtesy of Mangum Development.
Recently, the Cary Town Council approved the rezoning of about 23 acres across from WakeMed on Kildaire Farm Road from residential to mixed-use to allow for the building of Paraclete Professional Park.
Image courtesy of Mangum Development.
The project comes at a time when the town has been trying to respond to the need for senior housing, as nearly 5,000 Cary residents turn 65 years and older each year. The “Aging Issues Task Force,” a group of Cary officials and residents appointed by the town, completed a study in 2015 into how well Cary serves its senior residents. While the report said the town serves those 65 and up well, it also indicated that the community may lack adequate housing for the growing population.
Kevin Mangum of Mangum Development, a fourth-generation business owner and fifth-generation Cary native, develops world-class mixed-use projects. As Lead Developer for Paraclete, Mangum says the community will be “metropolitan” and “high-quality, but not ostentatious.” He continues, “You could expect to see some very nice amenities usually reserved for places like New York or Miami.”
Photo courtesy of Mangum Development.
The facility will have a walkable environment and a campus-like feel, complete with central gardens and fountains. Amenities will include covered parking for owners and physicians, a generous 4:1 parking ratio, “Class A” finishes, such as imported marble floors, and dining and shopping within walking distance at Waverly Place. “We think a large focus for baby boomers will be a desire for living near shops, restaurants, and excellent medical care,” said Mangum. “Paraclete happens to be next to a hospital and Waverly Place, and is convenient for family to visit their loved ones.” There are plenty of hotels just minutes away, including a Comfort Suites, Hampton Inn, Courtyard Marriott, and Extended Stay America.
Wind Down Wednesday. Photo courtesy of Waverly Place.
Waverly Place underwent a major facelift in 2015, including a multi-million dollar interior and exterior renovation of 15-year-tenant Whole Foods. Other shops and restaurants at Waverly Place include Cinebistro, Whisk Cookware and Cooking Classes, Hand and Stone Massage, Violets Boutique, and Fresca Cafe. In addition, Waverly Place hosts various free events throughout the year, such as “Yoga on the Promenade;” “Wind Down Wednesdays,” featuring free concerts; and Flamenco music at Fresca Cafe.
Paraclete Professional Park is expected to open in early 2018.
For more information about senior housing and retirement communities in the Triangle, click here.
For detailed information on local 55+ neighborhoods, click here.
For information and updates about Paraclete Professional Park, contact Real Estate Experts any time at 919-813-6449 or [email protected] Visit us online at realestateexperts.net.