The decision to downsize was the ultimate decision, but as you go through the process you’ll realize that decisions await you at every corner. Will you move into a house or an independent living community? What items come with you and what must go? Another important decision is what you’ll do with your current home. Below you’ll find helpful tips to help you navigate these decisions.
Deciding Where to Move
San Diego is home to a variety of unique home styles including one-story ranch properties, Spanish styles, townhomes, split levels, and post-modern homes. However, if you’re looking to live close to other seniors, independent living communities are a good option. They come with a variety of services like housekeeping and meal plans, so there’s no need to constantly manage household duties on your own. You’ll also maintain an independent lifestyle and will have access to in-home care on an as-needed basis. It’s worth taking a tour of nearby facilities to see what you think, but pay attention to the price tag. Costs of independent living facilities in San Diego range widely from $1,655 to $16,500 per month.
Deciding Whether to Sell Your House
One of the most common choices regarding your current home is to sell it and use that money to purchase your new home. To make things easy, hire a real estate agent. Agents have access to loads of information, including market trends, competing listings, and comps. Plus, if you’re wanting to sell your home quickly, you’ll need them to help you be aggressive about marketing. While your agent works their magic, get a head start on packing and decluttering. Your new home will have less square footage and storage space, so downsizing your items is a must. Start with the stuff that’s easy to get rid of first such as duplicate, broken, forgotten, and expired items, then go room by room. Decluttering is one of the important steps in staging your home as well so that buyers can focus on the home’s potential rather than your stuff.
Deciding Whether to Rent
If it looks like your home might be on the market for a while, you won’t be able to get the price you want, or you want to keep your home, renting is an option. However, this requires some investment on your end, including a renter’s insurance policy, permits, and repairs/updates. You must also decide if you want to be your own landlord or hire a property management company to help you find/screen tenants, collect rent, handle repairs, and communicate with tenants. You’ll be happy to learn that renting does have some tax benefits, including the ability to deduct rental-related expenses like mortgage interest, taxes, repairs/maintenance, cleaning, insurance, and even depreciation.
Deciding Whether to Keep the Home
For many seniors, the thought of selling the family home is difficult. Perhaps you want to pass the home on to children, or at least keep it in the family a little while longer. You may have this stipulated in your will, but how can you pass your home to children while you are still living? You may have heard about homes being sold for $1, which is a large gift. Nothing is stopping you from doing it, but if the home is worth $250,000, then you just gave a gift of $249,000. You get a $15,000 gift tax exclusion per person per year. You must then decide whether to pay the gift tax now or apply it your lifetime exemption of $11.4 million. There are other ways to transfer the property including re-titling or deeding.
Downsizing is a decision that requires much thought, and the same can be said as to what you’ll do with your current home. You can go the traditional route and sell, or choose a completely different path and rent or keep it altogether. Other decisions like where to move and what to do with your belongings will also have to be made. Think them through and talk them over with family and friends (and professionals) to arrive at the decisions you’re happiest with.
If you do decide to sell your home in San Diego, The McT Real Estate Group can help you with the process of selling your house. Contact us at 619-736-7003 so we can set up a time to have a conversation.