A growing number of home buyers are retirees who have decided to downsize to have less financial and home-related responsibilities. One part of the downsizing process that you don’t hear as much about is what you should do with your current home. Many seniors choose to keep it in the family, while others prefer to sell in order to finance their future. A third option is to use your home as a rental property. To make sense of these options, make sure you find the best resources to guide you through the process.
If you aren’t already working with an experienced real estate agent, this is the place to start. Real estate agents do much more than just sell homes — although, of course, a good agent can certainly help you find the perfect home when you’re ready to downsize. The full benefit of working with a real estate agent is that they can guide you through every step of the home selling and buying process — at no cost to you.
When it comes to selling, real estate agents can also advise you on when it’s a good time to sell and the price you can anticipate selling for, which will ultimately impact what you decide to do with your home. With this in mind, your realtor can also help you with other decisions that go into the selling process, such as what kind of updates your home may need and the right professionals to get the work done. These are just a few of the many ways that a trusted agent can be one of the most vital resources you have in making such a major decision.
Your Financial Advisor
As a senior, you have different financial needs and challenges than you did earlier in life. Most retirees live on a fixed income, but there’s always the possibility of your living expenses increasing while your income stays the same. You hope that your savings will cover these costs, but there’s a difference between hoping and having a plan, which is where a financial advisor can help. Your financial advisor can help you make sense of your assets and investments, and they can help you see the impact of either selling your home now or using it to generate rental income. If you can afford to buy a new home without selling, you may find that keeping your home as an asset is a smart solution. Homes typically continue gaining value over time, and you could also get extra income through rent.
However, for some people, selling is a better financial decision. Forbes explains how your home is a “hard asset,” as opposed to a liquid one, especially if you no longer have a mortgage on it. What this means is that you can’t count on selling if you find that you need to access the home’s value in a hurry. As you can see, the question as to which solution is a better financial move depends on your personal situation, which is why your financial advisor is a key resource.
A Property Management Company
If you’re considering turning your home into a rental property, another question to consider is how much of the work you would do yourself and how much you would need help with. You may want to consult with a property management company before deciding because they can help with everything from screening tenants and collecting rent to housekeeping and handling maintenance issues. A property manager like Turnkey will even install digital locks to ensure your home’s security. Just keep in mind that a property management company will end up costing you extra. And while you may still need a property manager, Market Watch explains how technology has also made becoming a landlord easier for seniors.
Remember too that, in many ways, you are your own best resource. Of course, you need expert advice before making such a big decision, but your own personal feelings factor in as well. Think about how you want to spend your time and money in retirement — and how selling vs. renting fits into that plan. This is a question you can only answer for yourself.
This article was contributed with kindness from Jim Vogel, and his goal is to “shed some light on this major decision, and take some of the stress out of downsizing”. I thank him for helping the seniors and active boomers that are looking for information as they prepare for transition. You can reach Jim for more information and further resources for aging at Elderaction.org.
Additionally, LendEDU was gracious enough to contribute to this article by offering to add a reference guide on their site that explains the basics of investing, including a piece on investing for retirement.
You can see it here: https://lendedu.com/blog/how-to-start-investing/
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