One of the objections I often hear from elder clients about moving is: "I own my house. I can't afford a monthly payment!" It may be a mistake to think that staying put is cheaper on a month-to-month basis than either purchasing a new home or renting. It's DEFINETELY a mistake to think because there's no monthly payment, it's not costing anything to live in the property!

Think about this. You're introduced to Henry, an 86 year old widow who contacts you because his daughter wants him to move. He shares his concerns about having to pay a monthly payment with you.

Henry owns his home and it's worth $250,000, What will Henry do with that money once he sells? Presumably he will place it in a low-risk investment vehicle such as a money market account. Henry may earn 4% on those dollars in today's market. For example, after Henry sells the house for $250,000, he will net about $227,000 after paying commissions, title and closing costs. Henry invests that $227,000 dollars, and there is an earning of $756.00 per month in interest. That's $756.00 per month that Henry is not receiving because those dollars are tied up in the house. Add that to other expenses of living in the home:

As you can see, although Henry doesn't pay a monthly mortgage, he has typical homeowner expenses, plus the expense of opportunity lost with that interest money. Henry is not living for free.

Now, let's say Henry does decide to move and wants to rent an apartment in an independent living community for seniors. In this example the house has been sold, Henry has net $227,000 and is drawing $756.00 interest on that money every month.

Because Henry is drawing $756.00 per month interest from the proceeds of his old house, his rent is substantially lower. In this example, it is less expensive for Henry to sell his home and rent.

Run the numbers for your clients and show them how expensive it is to stay put!