Renting Out the Family Home
As parents age, the family home becomes a sensitive issue. If a parent is alone, perhaps he or she can’t live alone any longer. Or the home may have too many fall risks (like stairs and tubs) for elderly parents. Frequently, this means the family home will be unoccupied until both parents pass away. So if the home is empty, should the family rent out the home?
To start, vacant homes will become a liability. Leaks develop. Vandals break glass. The lawn will become overgrown. Plus, if the home is vacant, then the homeowner insurance policy will become void after 90 days (on average). If you have a vacant home, then you will need a vacant home policy — and it’s significantly more expensive than a standard policy.
If you choose to rent out the home, you will probably need to make some serious changes to the interior. While old wallpaper and creaky doors give the home a character that you love, your future renters won’t love it. They might paint over the wallpaper. Or remove the door. Renters are likely to make some changes; so if you are sensitive about maintaining the home’s “homey” feel, then don’t rent it.
If family members move in (especially a younger generation), you should also assume that they will make changes. In fact, because they are family, they might be more likely to paint. Or worse, damage the home. No one will respect the home like you do.
If the family home is going to be unoccupied by the owners, then work with an estate planner to create a financial plan for the house. Whoever lives in the house needs to be financially responsible for some basic costs — like insurance and upkeep. Plus a good lawyer can help you create some management rules; Or the lawyer can act as an unbiased third-party to manage the property.
