Deciding what to do with your Phoenix home once it’s time to downsize is tricky. You have three main options – keeping it, renting it out, and selling – and each one comes with pros and cons.
While it seems straightforward, downsizing usually comes with a slew of other decisions. For example, if you now require 24/7 medical care and can no longer live safely in your current house, you’ll need to figure out where to move to might feel overwhelming. While you can look online for detailed facility reports, pricing info, payment options, and reviews from other families for nursing homes in Phoenix, it’s a lot to handle.
Seizing opportunities to make any decision easier is essential. That way, you can choose a path quickly, allowing you to move forward. If you’re debating between keeping, renting, or selling your current home in Phoenix as you prepare to downsize, here are points to consider.
What to Do With Your Home: Keep vs. Rent vs. Sell
The Pros and Cons of Keeping the Home
Usually, the main benefit of keeping the home is the ability to pass it down to a family member. That’s especially true if the house is paid off (or nearly so) and in good repair. In that case, it can provide a family member with a substantial amount of value without many of the financial hassles that come with the ownership transfer. However, it’s still possible to inherit property with a mortgage, so keep that in mind.
When it comes to drawbacks, ongoing costs and maintenance are a big part of the equation. Even if the house is paid off, you’ll have to deal with property taxes and insurance. Plus, maintaining the structure and systems is essential to keep the house in good shape, which isn’t always cheap.
If you’re on a tight budget and can’t transfer ownership immediately, then merely keeping the house might not be a great option. But if that doesn’t apply and you want to pass it down, it’s worth considering.
The Pros and Cons of Renting the Home
Renting the home can be the right choice if you want to generate long-term income and are open to navigating ongoing expenses. While you’ll still owe property taxes and have to cover maintenance costs, you’ll typically get a set sum from your tenant each month the house is occupied.
As for the drawbacks, operating as a landlord can be a lot of work. Landlords have specific obligations, and they can be a lot to manage. While you can choose to hire a property manager instead, you’ll have to direct some of your rental income to cover that cost. Depending on what the property manager charges, that could significantly limit your earning potential.
There can also be some tax complexities you’ll need to navigate. Additionally, if the property is occupied when you pass, it can lead to difficulties for the heir.
The Pros and Cons of Selling the Home
Generally speaking, selling your home has a few drawbacks. The main one is that you can’t pass that property down to an heir.
Otherwise, most of what you’ll experience is benefits. The Phoenix housing market is hot, with prices rising 31.3 percent year-over-year (as of February 2022). Plus, the demand for housing is expected to remain high throughout 2022. While mortgage rates are rising, concern that they’ll keep going up could keep buyers in the market.
By selling, you also eliminate any ongoing responsibilities relating to the property. After the sale, maintenance, property taxes, and insurance for the home are no longer your responsibility. You can also use the proceeds as a nest egg, giving you extra cash to fund your golden years.
Ultimately, selling is the right choice for many seniors. If it’s the right move for you, contact Russell Shaw to learn more about what your home is worth and how you can get it on the market.