Moving to a Senior Living Community on Oahu

Thinking of moving to an Oahu senior living community?

Before you make your move, you'll need to decide what to do with your current home. Should you rent your current home or sell it? There are several factors to consider when you are deciding what to do with your home before moving to a senior living community on Oahu.

Renting your home

A growing number of baby boomers are trading in their Oahu family homes to downsize to senior living communities, where they can participate in wellness programs and maintain an active, turn-key lifestyle. Initially, if it is your preference to rent out your home, there are many benefits. One advantage that many people find comforting is having the option to return to your home in the event you dislike living in a community setting.

Additionally, retaining your home allows you to continue building equity. You may also benefit from the monthly funds generated from your rental to subsidize the costs of your senior living community. On the flip side, tenants may not maintain the home as well as you, the homeowner. Home-operating expenses should be factored into your budget in the event an appliance breaks or property repairs are needed. Maintenance and repairs are the responsibility of the homeowner.

Selling your home

After moving to a senior living community, many seniors find that they truly enjoy their new lifestyle and decide that they have no intention of returning to their home. When you're ready to sell your home, it's important to consider the federal tax home sales exclusion law for capital gains. The federal tax exclusion on the sale of a principal residence is up to $250,000 per person or $500,000 for a married couple. To qualify for the exclusion you must have resided in the home as your primary residence for at least two of five years prior to closing of the sale. If your home has not been your primary residence for three years or more, it may be reclassified as an investment property. As a result, you could forfeit your tax exclusion and may be required to pay capital gains tax on the proceeds of the sale of your home.

In many cases, the amount of taxes owed can be significant. Before making any decisions about selling your home to move to a senior living community, you should consult with the appropriate legal, tax and accounting experts who can advise you on you particular circumstances.

Attend a Locations Senior Seminar

Ready to learn more about senior real estate needs? Attend an upcoming Locations Senior Seminar. Contact your Locations agent to learn more.