Before you make a major life move, such as buying a smaller home or entering assisted living, you have to decide what, exactly, to do with your current estate. There are many options, and the one you choose can have a significant impact on your finances. Keep reading as we answer a few common questions seniors often ask about the buying and selling process and how to keep a property in the family.
I want to sell my current home, but I cannot afford expensive upgrades. What can I do to get the most money at closing?
If you’ve lived in a house for any length of time, there are many small issues that you’ve learned to ignore. Little things like cracked tiles and dried-up caulk are quick fixes that won’t cost more than a few dollars to repair. However, if your home has not been updated since the early 2000s (or before), you might have to sell as-is, possibly for thousands less than you would if it was brought up to modern standards. The good news here is that some dated aesthetics can be rectified without a huge investment. For example, wood paneling is easily paintable, old light fixtures take only moments to swap out, and vertical blinds can be removed.
How can I afford to move if I don’t want to sell?
That depends entirely on your personal situation. If you do not have any savings and are on a limited income, you may not qualify for mortgage. But, if you do have financial padding, a bit of planning can allow you to keep your home in the family and purchase something more senior-friendly. Start by looking at your expenses and income. Redfin asserts that the type of loan along with property taxes and other expenses also factor into how much you can afford. Know what your bank account can handle before you begin your search. This will lessen the chances of looking at and falling in love with something you can’t pay for.
My spouse always handled money. How do I make (and stick to) a budget when I will have a house payment?
Many seniors choose to move out of their longtime home after the death of their spouse. When your spouse was the one that paid bills and earned the majority of your income, learning how to budget can be a challenge. Tiller Money, a budget-tracking app that works with Google Docs, notes that keeping an updated spreadsheet with your financial transactions is a great way to understand your incoming and outgoing funds. Write down how much you spend on housing, transportation, food, and other necessary expenses. Try to find information on these expenses for the last three to six months so that you know exactly what you can expect to spend. Your local bank branch should be able to pull all your transactions and help you sort them into categories.
What do renters want in a house?
If you’re thinking about renting your home for added income, you likely will have to make some repairs and updates. Most people in the market for a rental want a place that is clean and that shows minimum signs of wear and tear. Safety is also a priority, so make sure that all the windows and doors lock and that there is plenty of exterior lighting. You can look online for homes similar to yours to get a better idea of how much you can charge. Keep in mind that there are expenses that you, as the homeowner, must incur, including maintenance and, in some cases, utilities and lawn care.
Remember, what you do now affects both your quality of life and what you leave behind to your heirs when you pass. If you sell your home, you will have the equity to spend on housing, travel, or other interest/needs. On the other hand, you may not have real property to leave behind. If you keep your home and use it as a rental, you’ll have money coming in each month but will also run the risk of having bad tenants that damage the property. Before you make a decision, take the time to evaluate your financial state, and talk it over with your family. They may have other ideas about how you can afford and enjoy retirement without making any drastic changes to your life.
Laura is the Owner of Clean & Clutter Free, professional organizing services.