You don’t have to look far to appreciate that the U.S. population of older adults, those at least 65 years old, is increasing at historic rates. In the last decade, the population of older Americans increased by over 15 million, with many baby boomers now entering their 80s.
The majority of those seniors live in their own homes. And while some older adults may prefer the assistance offered by senior living, the vast majority prefer to continue living in their homes for as long as possible—according to the Joint Center for Housing Studies of Harvard University, nearly 90 percent of adults over 65 want to remain in their current homes as they grow older.
Labeled simply “aging in place,” this phenomenon will have a significant impact on the real estate market
and how you might work with clients, friends and even family.
Meeting the Challenges of Aging in Place
For seniors, aging in place is not as simple as just deciding that they’ll stay in their own home. For many, that home was well-suited for their more active, more mobile years. As they age, that home may present increasing challenges for them, caregivers and family. In fact, one-third of the participants in a 2021 AARP survey said modifications would be necessary in their current residence so they or a loved one could continue to live there should physical limitations occur.
Needed changes can come from decreased mobility—an upstairs bedroom that once offered privacy and quiet may be increasingly difficult to get to. If the senior is using a walker, getting to a second-floor bathroom may be a near impossibility. For others, diminished cognitive skills and memory challenges may suggest the need for protection from a stove left on, scalding water, tripping hazards and more.
There may come a time when a senior must move to a facility that provides greater assistance. Until then, there is a lot that can be done to make aging in place a more viable option. You can help your clients and their families think about whether aging in place is the right choice and how to best do it.
THESE SIMPLE CHANGES MAKE AGING IN PLACE EASIER
Many beneficial aging in place modifications are simple and relatively inexpensive.
Aging in Place Remodels That Can Help, or Harm, Home Value
All home modifications are not created equal when it comes to a home’s sales price. Some enhance its value. Others reduce it.
According to Bankrate, these modifications can improve home value for seniors:
- Full bathroom on main level
- Doorways at least three feet wide
- Hallways at least four feet wide
- Non-slip floor surfaces
- Entrances without steps
- Lever door handles (instead of knobs)
- Hands-free faucets
- Pull-out drawers (rather than standard cabinets)
- Automated light shades
- Smart lighting system with LED bulbs and rocker light switches, controllable from smartphones
Some aging in place modifications can decrease the value of a home.
If resale value is a consideration, think carefully about these installs:
- Elevator (56 percent of respondents to a survey
by the NAHB did not want this feature) - In-law suite (42 percent of NAHB respondents
did not want this feature) - Permanent exterior ramps
- Chair or wheelchair glides on stairs
- Large grab bars
- Push bars on doors (instead of handles)
- Walk-in bathtubs
It’s important to note though, that even with features that could increase the value of a home, the cost of making that change could outweigh the benefit. For example, widening a hallway may be a benefit. But in many homes, one of the walls in a hallway is likely loadbearing, which could cost $20,000 to $50,000 or more to change.
PAYING FOR AGING IN PLACE REMODELING
Aging in place remodels can get expensive, a concern for those on or near to fixed retirement incomes. Fortunately, there are a number of ways for seniors to pay for aging in place remodels, from borrowing against the equity they’ve built up in the property to other financing.
Home equity line of credit (HELOC)—If a good portion of the home is owned outright (most of the mortgage is paid off), seniors can use that equity to obtain a home equity line of credit. Since the home is collateral for the loan, interest rates tend to be lower, and funds can be withdrawn as needed for the remodel. According to the IRS, homeowners can deduct the interest on up to $750,000 of the loan if the funds are used to “substantially improve” the home.
Home equity loan—A home equity loan is similar to a home equity line of credit except that funds are released in a lump sum which is repaid in installments. Like HELOCs, home equity loans tend to have relatively lower interest rates. And the same tax benefits as a HELOC apply.
Home improvement loan—If the homeowner has good credit, this type of personal loan from a bank, credit union or online or peer-to-peer lender frequently doesn’t require a lien to be placed on the home.
Reverse mortgage—Seniors aged 62 or older who own their home outright (i.e., the mortgage is paid off)may be eligible for a reverse mortgage, which converts a portion of the home’s equity to cash while allowing them to continue living in the home. Instead of monthly repayments of the funds, the debt is due only when the property is sold or permanently vacated.
State housing finance agency loans—State agencies and nonprofit organizations such as Rebuilding Together often offer financial assistance for seniors. There are also funds that may be available through the Older Americans Act, distributed by Area Agencies on Aging (AAA). Keep in mind that there are income-limit requirements, so seniors need to check for a Housing
Finance Agency in their area to understand options.