Should we rent out the house instead of selling it to pay for care?
Answered by Chris Deutsch, Founder & Editor
Licensed Minnesota Realtor #20382264 ·
The short answer
Sometimes it's the right call — but run three honest numbers before deciding, because the rental that "covers the care bill" on paper often doesn't in practice.
On stage The 60-second answer
Captions on · Transcript below
The stage is set.
Chris's video answer is on its way. Until then, the short answer above says the same thing.
The transcript posts with the video.
The longer answer
First, the real net: rent minus taxes, insurance, management, and the repair appetite of an older house. A 1970s rambler doesn't stop writing bills because a tenant moved in. Second, the job: somebody becomes a landlord, usually the same adult child already managing everything else. Third — and this is the one households miss — the tax clock. The capital gains exclusion on a primary home generally requires having lived there two of the last five years. Rent the house long enough and that exclusion can quietly expire, which can turn a tax-free sale into a taxable one. Confirm the specifics with a CPA; I'm not one.
If you want, I'll pull what the house would actually rent for and what it would actually sell for, so the comparison is real instead of theoretical.
The next department over
What people in this spot usually ask next.
- Senior transitionsMom's deed has a life estate on it. Can she still sell the house?Read the answer
- Senior transitionsWhat does senior living actually cost in the Twin Cities — and will the house cover it?Read the answer
- Senior transitionsWill my parents owe capital gains tax after 40 years in the same house?Read the answer
- Senior transitionsShould Mom just give us the house instead of selling it?Read the answer
- Inheritance & probateShould we rent out the inherited house instead of selling it?Read the answer
- Divorce & separationI'm divorcing in my 50s. Should I buy again or rent for a while?Read the answer
From the editor's desk
“As Founder and Editor, I review, correct, and stand behind every answer.”
Is your situation more specific than the market? That's the one worth talking through.