Downsizing your home in retirement can be a liberating choice. If you’ve spent decades in a large home — especially one that contains far too much clutter — cutting ties with the bulk of your material items can feel like a weight lifted off of your shoulders. Whether you plan to move into a slightly smaller home or a tiny home, you must first decide what to do with your current residence.
Unsure which option is right for you? Here are some top choices for what to do with your existing home.
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Sell it to use equity for new home
For most retirees or soon-to-be retirees, selling the family home prior to downsizing is often the go-to option. Because of the many advantages of selling, it is easy to see why so many seniors take this route.
Those who have a decent amount of equity in their home, and those who have paid off their homes, prefer selling for a number of reasons. First, you can use the proceeds from your home sale toward the purchase of your new property. You can get an accurate idea of how much you stand to make with an online calculator. Be sure to take into account your current mortgage balance (if you have one), applicable realtor fees, and the average home sale price in your local area.
Additionally, selling your current home means that you won’t have to worry about the upkeep of two properties. Since many retirees seek to simplify their life — and to travel — having to worry about maintaining a second home is often too much of a burden. While it can be difficult to let go of your home for sentimental reasons, it often makes practical sense in the long-run.
Use it as a residential or vacation rental
If selling isn’t the right option for you for whatever reason, you have several other quality ways to use your property. If the idea of generating an additional stream of income sounds appealing, consider using your home as a residential or vacation rental.
The best option will depend on your preferences, location, and how much effort you want to put into the home. If you decide to rent to long-term tenants, your duties as a landlord can become time-consuming. However, for the several thousand you can make each month, this commitment can be well worth the effort. You can also opt to use one of today’s top vacation rental platforms (such as Airbnb) to rent out your property to those who are visiting the area. On average, hosts on these platforms make $924 per month. No matter which option you choose, renting out your home can provide you with a lucrative side income.
Sell to a relative to keep it in the family
If you feel incredibly sentimental about your home but know that you don’t want to use it as a rental, explore the idea of having a family member purchase your home. As an added incentive, you can sell your home to this relative for much lower than what they would pay for comparable homes in the area.
If you pursue this option, be cautious not to provoke feelings of guilt or obligation. Casually mention wanting to keep the home in the family as your first choice, and see if any relatives have a genuine interest in purchasing the property.
Prepare for your move
Once you’ve decided what to do with your existing home, you’ll need to start planning your move. You can save time, reduce the chances of an injury, and lower stress by hiring professionals to handle your move. You can find qualified local movers through sites like Angi. Carefully, look over customer testimonials and feedback when selecting a moving company. If you’re concerned about costs, you may also be able to find moving services that offer credits and deals.
Deciding what to do with your current home prior to downsizing can be a conundrum. Exploring the choices above should provide added clarity, and help you make the right choice. Whatever choices you end up making, just make sure to get sound advice. Housing and home equity are extremely valuable assets in Retirement. If you would like to explore more of these and other ways you can utilize your housing wealth for Retirement, please give call David Reardon at 888-399-3331.