5 Questions to Ask to Help Seniors Decide How to Downsize

While a spacious home with a large yard is often a priority for first-time homebuyers, most seniors are in a season where downsizing makes sense. If you’re considering downsizing or grappling with the how-to of it all, check out this guide from Matthew Share.

Is Senior Living a Good Fit?

The first question to ask yourself is whether you’re comfortably able to live on your own. Many older adults find that a senior living facility is the right fit based on medical or mobility needs.

When contemplating a move to a local skilled nursing facility, compare options to find the best community. Cost may be a priority, as well as good reviews and an ample list of amenities such as on-site dining, housekeeping help, and wellness facilities.

Should You Buy or Rent?

For seniors looking to continue living on their own, there’s another decision to make: whether to buy or rent. If you currently own a home, there are perks and downsides to both buying a new property and renting a home.

Should you choose to purchase a new home, you might need financing, depending on how much your current house is worth. Financing a home in retirement can be a bit more complicated than when you’re working full-time, but it’s not impossible.

Then, you’ll need to take care of regular repairs, lawn maintenance, and general upkeep. Think about whether you want these responsibilities and if you can manage them both now and in the future. Of course, there are also some possible benefits to homeownership come tax time.

If homeownership isn’t a great fit at this stage of your life, renting might be a suitable alternative. Typically, renters don’t need to worry about repairs or even outdoor maintenance. Plus, utilities may come included, meaning you don’t need to manage an internet bill or cable subscription.

Check out rental listings for location, price, and amenities to see if there’s a place that meets your needs.

Do You Need to Sell Your Home?

Though selling your current home can free up your finances, you may not want to list the property just yet. There are other possibilities when planning to downsize during retirement; you might rent your home out or keep it in the family. Renting your home might be a financial benefit if the mortgage is paid off (or nearly paid off). Rental income could be a reliable income source, says AARP, though being a landlord comes with complications of its own. But if you decide to make your home a rental, hiring a property manager costs a fraction of the rental price and relieves you of day-to-day duties.

Should You Keep Property in the Family?

Keeping your home in the family is another option, should you want to pass the property to a family member later on. There are a few ways you can transfer ownership of a property, namely through a will.

However, giving someone a home as an inheritance does involve a tax expense. Depending on what the home is worth and who you want to give it to, a private sale might be preferable. Selling a house to a family member may involve a capital gains tax, given the property value and the sale amount.

Can You Rent to a Family Member?

Keeping your home in the family via renting it is also a possibility if you’re not ready to sell. Including your home in a trust (so that it remains in the family after you are gone) is one way to ensure someone inherits the property.

But while you can profit financially, giving your family member a rental opportunity could be beneficial to both parties. However, it’s important to understand the tax implications of rental income, as Chase explains, including fair market value rent limitations.

The path to downsizing will be different for every senior. Whether you plan to move to a rental or buy a new place, it will take some effort to get moved and settle in. But once you are in your new place, you will be able to enjoy your golden years stress-free.

When you’re working with Matthew Share, you can be sure that you’ll be guided by an individual with a tremendous ability to analyze and advise while being personable and having fun. Call 678-520-3113.

Content contributed by Andrea Needham of eldersday.org