Senior Living: How and When to Downsize

When you’re ready to downsize, figuring out what to do with your existing home is often the most difficult decision. The good news is that there are more options than you may realize. Consider the pros and cons of each option before finalizing your decision.

Get Roommates

While many people strictly recall their college days when thinking about roommates, seniors shouldn’t overlook this possibility. If you have a large family home that is now too big, getting a roommate or two may be the answer.

First of all, by charging roommates a fair amount for rent, you can effectively defray some of the costs of home ownership and earn some tax benefits. Since you’ll still be living in the home, you’ll also be able to ensure the house is being taken care of adequately.

Second, companionship is very important as you age. Research at the University of Chicago found that seniors are 14 percent more likely to suffer a premature death if they have feelings of being extremely lonely. Another study found a link between loneliness in seniors and depression, and even elevated blood pressure. If companionship is the primary reason you’re interested in a roommate, consider a family member who may not be able to contribute as much financially.

However, before you bring in roommates (family or not), be sure there are clear understandings about money, personal space, and anything else that may cause conflict. It’d be best to get those understandings in writing prior to avoid potential problems.

Sell the Home and Move On

If you’re looking to downsize, selling your current home has a lot of advantages. Not only do you get money in the bank from the sale of the house, you get to move into a home of your exact specifications.

To begin the process of selling your home, the initial step is to hire a Realtor and figure out how much comparable properties are selling for in your location. If you are satisfied by the number you discover, that same Realtor will likely be able to find your new home. If you find the home you want to buy prior to selling your house, you can always include a contingency clause in order to ensure you aren’t on the hook for two mortgages at the same time.

Become a Landlord

If you can’t bring yourself to sell your family home, you can always rent it out instead. While being a landlord isn’t for everyone, it is a way to make money off of your home while also keeping the property in the family.

Investigate what the going rate is for rentals in your local area. If that number provides positive cash flow, renting your family home could be worth pursuing.

If you don’t want to deal with the hassles involved with being a landlord, you could also hire a property management company. Hiring a management company is especially useful if you’re setting up your home as a vacation rental because guests prefer professional housekeeping services and on-site support if any issues arise. Since the cost involved with property managers varies widely, be sure to research thoroughly before signing on the dotted line.

Being a homeowner gives you a plethora of options. As you begin the process of downsizing, you can use your family home to help you reach your goals, whether that is to increase your retirement savings, create a monthly income stream, or leave something behind for future generations.

If you choose not to sell the home, it can become a source of income (for you and potentially for your children). For you, you can collect rent to cover expenses. For your children, not only would they be able to collect rent, but also benefit from the increased market value. If your kids choose not to sell but instead use this as their primary residence, the house would not be reassessed for property tax purposes so they would pay lower property taxes.

This column idea and much of the information came from Jim Vogel. You can learn more about senior living by visiting his website:

If you have questions about property management or real estate, please contact me at or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.

Dick Selzer is a real estate broker who has been in the business for more than 45 years.

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