What Should I Do With My House When I Move Into a Cooperative?

Moving into a senior cooperative means making a choice about your current home. Should you sell it, rent it out, or something else? Most people choose to sell. Here is how to think through your options.

For most people, the biggest question about moving isn't about the co-op. It's about the house they're leaving behind. You've lived there for years.

It's where you raised your kids and built your life. Deciding what to do with it is a big step, both for your heart and your wallet.

There are three main paths: sell it, rent it out, or keep it empty. Each has pros and cons. The right choice depends on your money goals and how much stress you want to handle.

1Option 1: Sell Your Home

Most people who move into a co-op choose to sell. It's often the simplest path.

The money helps you buy into the co-op. Most co-op shares are bought with cash. Your home is likely your biggest asset. Selling it gives you the cash you need to buy your new share. Without this money, many people can't afford the move.

It stops monthly costs. A house you don't live in still costs money. You'll still pay for taxes, insurance, and repairs. Selling stops these bills. It turns a house that needs work into cash in the bank.

It makes things easier for your family. Owning two places can be hard for your heirs to manage later. Selling now makes your estate much simpler.

You can save on taxes. If you've lived in your home for two of the last five years, you might not have to pay taxes on the profit.

This is called a capital gains exclusion (a tax break on your home's profit). You can save up to $250,000 if you're single, or $500,000 if you're married. This tax break can go away if you wait too long to sell.

2Option 2: Rent It Out

You might want to keep your home to get monthly rent. This is possible, but it adds a lot of work.

You become a landlord. Being a landlord is a part-time job. You'll have to find tenants and fix leaky sinks. Many people find the stress isn't worth the extra money.

It's harder to get a loan. If you need a share loan (a loan to buy into the co-op) for your co-op share, banks will look at your old mortgage. This can make it harder to qualify.

The tax clock starts ticking. As we mentioned, you could lose your tax break if you rent out the house for too long. If you sell later, you might owe the government more money.

Renting works best if you only need to do it for a short time. For example, it might help if the housing market is slow.

3Option 3: Keep It Empty

This is rarely a good idea. An empty house is a risk. Pipes can burst and no one will know. You also have to pay for extra insurance for vacant homes.

You'll still be paying taxes on a house that isn't helping you. It's usually better to sell and invest the money.

4The Timing Question

"What if I sell my house and have nowhere to live?" This is a common fear. But we can plan for this. We can coordinate the sale and the move so you're never without a home. Here are a few ways we do that:

• Sale contingencies: Some co-ops let you wait to close until your house sells.
• Leasebacks: You sell your house but pay the new owner to stay for a month or two.
• Bridge loans: These are short-term loans that help you buy the co-op before your house sells.
• Short-term stays: Sometimes staying with family for a few weeks is the easiest way.

The key is to start planning early. The more time we have, the less stress you'll feel.

5Why Working With a Specialist Matters

You don't have to use the same person to sell your house and buy your co-op. But it makes life much easier. A specialist knows how to time both moves perfectly. They can spot problems before they happen.

Lisa Dunn is a Seniors Real Estate Specialist® (SRES®). She helps seniors in Minnesota sell their homes and move into co-ops. She handles both sides so you don't have to worry.

Schedule a free talk to discuss your plans, or call 612-599-3484. We are here to help!

Have a house to sell first? I’ll help you time it. See what your house is worth or book a free 30-minute call.