Alliance America Logo Contact About Us Articles Home
picture of a home at different stages of its life

Should you keep or sell your aging parent's home?

by Alliance America
April 17, 2024


The transition of an aging parent into senior care marks a significant turning point for many families, often bringing to the fore a complex and emotionally charged decision: whether to keep or sell the parent's home. This decision extends far beyond simple financial calculations, deeply intertwining with the emotional fabric of the family.

The family home often embodies a treasure trove of memories and history, making the decision emotionally weighty. For the aging parent, the home may represent a lifetime of hard work and memories, a physical anchor to their past and identity. For family members, the home might symbolize their childhood, family gatherings and milestones, making the thought of selling it feel like closing a significant chapter in their lives.

On the other hand, financial considerations play a critical role. The decision could have far-reaching implications for the parent’s care and the overall financial health of the family. Keeping the home might mean tapping into a valuable asset for rental income or banking on its future appreciation. Conversely, selling the home could provide immediate funds to support the parent's care needs, alleviate the burden of maintenance costs or potentially simplify future estate settlements.

This decision often surfaces at a time of heightened stress and emotional vulnerability. The transition to senior care can be a difficult period for both the aging parent and the family, fraught with concerns about health, independence and change. Deciding the fate of the family home amid these emotions can add an additional layer of complexity to the situation.

Understanding the full spectrum of implications – financial, emotional and practical – is crucial in making an informed decision. Each family must weigh the sentimental value of the home against the financial realities and future planning needs. It’s a decision that requires careful consideration, open family communication and professional guidance.

In essence, deciding whether to keep or sell an aging parent’s home following their move to senior care is a multifaceted choice that can significantly impact the family's future. It's a decision that intertwines the heartstrings of the past with the practicalities of the present and future, necessitating a balanced approach that respects both emotional attachments and financial realities.

Exploring the available options for an aging parent’s home

When an aging parent transitions to senior care, families are presented with multiple paths regarding the future of the parent's home. Each option comes with its unique set of considerations and potential outcomes. Here are some of the available options:

  • Renting it out. Transforming the home into a rental property can provide a steady stream of income that can be used to support the parent’s care expenses or other family needs. However, this option requires managing the property or hiring a property manager, dealing with tenants and maintaining the property in rentable condition.

  • Leaving it vacant. Some families may choose to keep the home vacant, preserving it as a sentimental asset or as a future residence for family visits and gatherings. While this option maintains the family’s emotional connection to the home, it also involves ongoing costs such as property taxes, insurance and basic maintenance without any income to offset these expenses.

  • Using it for other family members. The home could also serve as a residence for other family members. This could be beneficial if another family member needs a place to live or if it keeps the home within the family, preserving its sentimental value. However, this choice might bring its own set of familial dynamics and financial implications to consider.

  • Immediate sale. Opting for an immediate sale of the property can quickly liquidate the asset, providing funds that can be crucial for the parent’s care or other financial needs. This option can be practical in a favorable real estate market and when quick access to funds is necessary. However, it may also bring emotional challenges as the family has to let go of the home quickly.

  • Delayed sale. Delaying the sale of the home is another strategy. Families might choose this if they anticipate an increase in the property’s value or if they need more time to prepare for the sale, both emotionally and practically. This approach allows more time for the market to potentially improve and for the family to come to terms with selling the home. However, it also means continuing to bear the costs of maintaining the property in the interim.

Each of these options requires careful consideration of the family’s financial situation, the real estate market and the emotional ties to the property. The decision of what to do with an aging parent's home is rarely straightforward and often involves balancing practical financial needs with the sentimental value that the home holds for the family.

Advantages of keeping an aging parent’s home

a grandmother with her two grandchildren

Retaining ownership of an aging parent's home can offer a multitude of benefits, ranging from emotional connections to financial advantages. This decision, while complex, can provide significant rewards for the family.

The family home often serves as a repository of cherished memories, holding immense sentimental value. It's a tangible link to the past, preserving the history and legacy of the family.

Keeping the home allows family members to maintain this connection, offering a sense of continuity and comfort. It can be a place where generations have grown up, celebrated milestones and gathered for holidays, making it a priceless emotional asset.

Financial benefits of keeping the home may include:

  • Potential rental income. Renting out the property can be a source of steady income for the family. This income can help cover the costs of the aging parent's care, alleviate financial burdens or contribute to other family needs.

  • Long-term property appreciation. Real estate typically appreciates over time, and holding onto the property can result in significant capital gains. This appreciation can be a strategic financial investment, potentially yielding a higher return in the future.

  • Flexibility for future use. The home can be reserved for future use by family members. It can serve as a residence for children or grandchildren, providing them with a home in a familiar and meaningful setting. The property can also be adapted for other uses, such as a vacation home or a gathering place for family events, maintaining its role as a central hub for family connections.

Retaining the home offers the flexibility to sell or rent it at a later date, should the family's circumstances or the real estate market change. This allows the family to make future decisions based on the most current and beneficial situation. Keeping the family home can be a significant aspect of estate planning. It allows the family to retain an asset that can be passed down to future generations, keeping the property within the family lineage.

The home can also serve as a substantial part of the aging parent's estate, potentially aiding in balancing estate distributions among heirs.

Indeed, the decision to keep an aging parent's home offers a blend of emotional and financial advantages. The sentimental value of maintaining the family home, combined with the potential for rental income and property appreciation, presents a compelling case for retaining the property. Additionally, the flexibility it offers for future family use or as a strategic asset for later liquidation provides a range of options for families to navigate their evolving needs and circumstances.

Disadvantages of keeping an aging parent’s home

young home owners looking at a leak in their inherited home

While retaining an aging parent’s home can have its advantages, there are also several downsides that families must carefully consider. These range from financial obligations to management challenges and emotional strains.

Some of the financial burdens of keeping the home include:

  • Ongoing maintenance costs. Homes require regular upkeep and maintenance to remain habitable and retain their value. These costs can include routine repairs, landscaping and general upkeep, all of which can add up over time and place a financial strain on the family.

  • Property taxes and insurance. Owning a home comes with the obligation to pay property taxes and maintain homeowner’s insurance. These expenses are ongoing and can be significant, depending on the property's location and value.

  • Utility expenses. Even if the home is unoccupied, utilities such as electricity, water and gas may need to be kept on, leading to additional costs.

If the decision is made to rent out the property, the family takes on the role of landlord, which includes finding and managing tenants, collecting rent and handling lease agreements. This can be time-consuming and sometimes challenging, especially if tenants encounter issues or conflicts arise.

Rental properties require regular maintenance and occasional repairs, which can be costly and require prompt attention. Managing these repairs, either personally or through a property manager, adds an extra layer of responsibility.

Being a landlord comes with legal responsibilities, including adhering to landlord-tenant laws and ensuring the property meets safety and habitability standards. This also includes accounting for rental income and related expenses for tax purposes.

Also, there can be emotional challenges and stress associated with maintaining an unoccupied home. Concerns about security, vandalism or deterioration can be worrying, especially if the property is in a different location from where the family members reside.

Managing a tenant-occupied property can also be emotionally taxing. Issues like late rent payments, property damage or disputes can lead to stress and frustration. Decisions regarding property management can sometimes lead to disagreements or conflicts among family members. Differing opinions on how to use, maintain or manage the property can strain family relationships.

In considering whether to keep an aging parent's home, it's essential to weigh these disadvantages against the potential benefits. The financial responsibilities, management duties and emotional stress that come with property ownership are significant factors that can impact the family's well-being and finances. Families need to assess their capacity to handle these challenges and determine if keeping the home aligns with their overall goals and circumstances.

Advantages of selling an aging parent’s home

Selling an aging parent’s home can bring several key benefits, particularly from a financial and practical standpoint.

The sale of the home can unlock the equity built up over the years, providing a significant financial resource. This can be especially crucial if the parent's senior care needs are extensive, as the proceeds can be used to cover care expenses, medical bills or other necessary costs.

Accessing this equity can alleviate financial pressures on the family, especially if there are no other substantial assets or savings to draw upon.

Selling the home also can streamline the estate planning process. Without real estate to consider, the estate becomes simpler to manage and distribute among heirs, potentially reducing legal complexities and costs.

This simplification can lead to a more straightforward and quicker settlement process for heirs, reducing the time and effort involved in managing and closing the estate.

a for sale sign in front of a house

Selling the property frees the family from the responsibilities and costs associated with maintaining a home. This includes ongoing expenses like property taxes, insurance, utilities and repairs.

The burden of property management, especially if the family members do not live nearby, is eliminated. This can be a significant relief, particularly for families already dealing with the demands of supporting an aging parent.

Disadvantages of selling an aging parent’s home

Selling a family home is not without its drawbacks, predominantly emotional and financial. For many, the home is more than just a physical structure; it's a repository of cherished memories and a symbol of family history.

The decision to sell can bring feelings of loss and nostalgia, not just for the aging parent but for all family members who have emotional ties to the home.

Also, there can be significant tax implications when selling a property, particularly if it has appreciated in value. Capital gains tax may apply, which can affect the overall financial benefit of the sale.

Additionally, selling the home means losing out on potential future appreciation. Real estate is often a sound long-term investment, and selling could mean missing out on further increases in property value.

Factors to consider in keeping or selling an aging parent’s home

Several key factors should influence the decision to sell or keep the home. They include:

  • Family’s financial needs and parent's care expenses. The family's financial situation and the cost of the parent’s senior care are primary considerations. If the sale of the home is necessary to finance care expenses, this need may outweigh other factors. It's important to assess whether other financial resources are available and sufficient to meet these needs without selling the home.

  • Real estate market conditions. The condition of the real estate market can significantly impact the decision. In a strong market, selling might yield a high return, making it a more attractive option. Conversely, in a weaker market, it might be advantageous to delay the sale in anticipation of better market conditions.

  • Family dynamics and sentimental attachments. The emotional attachment of the family members to the home is a crucial factor. If there is a strong sentimental desire to keep the home within the family, this might outweigh the financial benefits of selling. The dynamics and consensus among family members are also important. A decision that is harmonious and supportive of everyone’s feelings and needs can prevent conflicts and ensure a more positive outcome for the family.

Alliance America can help

Alliance America is an insurance and financial services company dedicated to the art of personal financial planning. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.

A mother reading a book with her daughter

Your legacy is vastly more than an amount of money left to your surviving beneficiaries. Part your legacy can be the example of a life well-lived that’s achieved through proper planning.

A senior couple stressed over tax liabilities

Too many people enter retirement with burdensome mortgages, car payments and credit-card debt that they’ve amassed during their working years. Proper management of these liabilities is fundamental to your current and future financial viability.

A daughter hugging her mother

Financial planning often is motivated by our love for our life partners, children, family members and friends.

Using a calculator to calculate taxes

Taxes have a significant impact your finances and can siphon assets unless you have a prudent approach to meet your objectives.