Real estate decisions — selling the house, keeping the house, renting the house
Reviewed by the How To Help Your Elders editorial team | Updated March 2026
Your parent's home is likely their single largest asset, and deciding what to do with it as care needs change is one of the most consequential financial decisions your family will face. This article walks through the three realistic options, what each one costs and produces, and how to make the decision without losing sight of what your parent actually wants.
You Are Not Being Callous for Thinking About This
The conversation usually starts like this: your parent is in their 80s, maybe showing some signs of needing help. Suddenly you're thinking about their house. Maybe they can't manage the stairs anymore. Maybe the maintenance is becoming overwhelming. Maybe you're wondering if that equity sitting in the walls could help pay for care. You find yourself lying awake at 2 AM, running the numbers in your head, and it makes you feel guilty for even thinking it.
You're not being callous by considering this. Your parent's home is one of their largest assets, and decisions about it are genuinely consequential for their financial future. You're thinking about it because it matters.
The house is not just a house, though. It's where your parent has built memories, maybe where they raised you. It's identity and safety and independence all wrapped together. That emotional weight is real and legitimate. But so are the practical questions: Can your parent afford to stay there? Will they want to? What happens to that house if they need long-term care? These are not cold calculations. They are part of loving someone well.
According to the NAR (National Association of Realtors), the median home price in the United States was approximately $407,500 as of late 2024. For many older Americans, their home represents 60 to 70 percent of their total net worth. That concentration of wealth in a single illiquid asset creates both opportunity and risk when care costs enter the picture.
Three Things Happening at Once
The house represents three different things, and it helps to untangle them. First, there's the financial piece: equity, taxes, selling costs, and what that money means for care funding. Second, there's the practical piece: can your parent physically stay in the house as they age, or will modifications become necessary or prohibitively expensive? Third, there's the care piece: will someone be providing care in the home, or is your parent likely to move to a facility?
When most adult children start thinking about a parent's house, they are focused on one concern: "Will this house need to be sold to pay for care?" That's understandable, but it's not the first question. The first question is simpler: "Does my parent want to stay in this house?"
If the answer is yes and your parent is physically and cognitively able to manage it, then the conversation shifts. You're looking at maintenance costs, property taxes, insurance, utilities, and yard work. An older person living alone might spend $4,000 to $8,000 annually on just the care and upkeep of a single-family home, depending on its age and condition.
If the answer is no, or if the practical barriers become too high, then you're looking at options with different implications for care and finances.
Selling: What It Actually Produces and What It Costs
Selling the house is straightforward in concept but complicated in execution. Your parent receives the proceeds minus the real estate agent's commission (typically five to six percent according to NAR), plus any capital gains tax owed and closing costs. For a $400,000 home, this might net $350,000 to $370,000 after all costs. The IRS provides a capital gains exclusion of up to $250,000 for a single filer ($500,000 for married couples) on the sale of a primary residence, which significantly reduces or eliminates the tax burden for most older homeowners.
That money then becomes part of the asset picture for care planning. If your parent needs Medicaid later, there are specific rules about how recently a house was sold and where the money went. Medicaid's look-back period examines financial transactions from the prior five years in most states.
The reality of selling: your parent probably doesn't have the emotional energy to manage an open house or negotiate with buyers. If they're dealing with health changes, selling can feel impossible. You'd likely need to manage the process, which means coordinating with agents, contractors for repairs, inspections, and closings. If your parent is still living in the house while it's listed, they'll need to keep it showing-ready, which is genuinely hard work for someone with limited energy.
Keeping the House and Aging in Place
Keeping the house and staying there is viable if your parent has sufficient income and assets to cover ongoing costs without putting themselves at financial risk. The advantage is obvious: no disruption, continuity, control.
The disadvantage is the increasing likelihood that the house won't work long-term. Eventually, your parent might need 24-hour care, which is very expensive to deliver in a home. According to Genworth, round-the-clock home care can exceed $20,000 per month, far more than most assisted living facilities charge. If your parent stays in the house while needing care, you're adding expensive in-home care or relying on family members to provide it. Some families make this work. Others find themselves stretched too thin, with a parent still in the house but not getting adequate care, and family members burned out from trying.
If your parent wants to stay, understand the modification costs. A bathroom on the main floor matters. Stairs become a real problem. The cost of installing a chair lift or reconfiguring a bathroom can range from $3,000 to $20,000, and sometimes that money goes toward a place they might not be able to stay in long-term anyway.
Renting: The Income Stream Option
Renting out the house is an option fewer families consider, but it can work in specific situations. Your parent gets a monthly income stream, and the property might appreciate over time. But landlording is active work. You'll need to handle tenant screening, lease management, maintenance coordination, and taxes. The house will need to be in decent condition to attract tenants. According to the IRS, rental income is taxable and must be reported, though many expenses associated with the rental property are deductible.
If the house is in a state with tenant-friendly laws, you'll have protections as a landlord but less flexibility if you need to sell quickly later. Most importantly, if your parent needs care in two years and the house could have been sold to help fund it, keeping it as a rental might mean you don't have the cash when you need it. Eviction timelines and lease obligations can delay access to the equity for months.
Making the Decision Together
Before anything changes, you need to talk with three people: your parent, an attorney, and ideally a financial advisor who understands elder care planning.
Your parent needs to think through what they actually want. Not what they think they should want or what they think will be best financially. If keeping the house matters emotionally, that's a legitimate factor. If the upkeep is making them anxious, that matters too. This conversation is easier if your parent can articulate it now, while they're able, rather than you making assumptions later.
An attorney matters because of what happens next. If your parent is considering selling or renting, they need a lawyer to handle the transaction properly and explain the tax implications. More importantly, if there's any possibility that your parent might need Medicaid, selling a house at the wrong time or in the wrong way can create problems. A qualified elder law attorney in your state can advise on timing the sale properly and managing the proceeds.
A financial advisor who specializes in elder care planning can help project your parent's needs and assets. Will the house sale be necessary to fund care, or is other retirement income sufficient? If the house needs to be sold eventually, is now the right time? What tax implications exist?
The timeline depends on your parent's situation. If they're already struggling to manage the house, the timeline might be months. If they're managing fine but you're looking ahead, you have more time. If health is declining rapidly, you might be making this decision faster than feels comfortable.
What matters is that your parent feels heard, that decisions are made together when possible, and that you're not making this choice without understanding what the house means to them. The house is probably the biggest asset your parent owns. Being thoughtful about it is exactly what you should be doing.
Frequently Asked Questions
Will my parent have to sell the house to pay for nursing home care?
Not necessarily. In most states, a primary residence is exempt from Medicaid's asset calculations as long as the person intends to return home (or a spouse or dependent lives there). However, after your parent's death, most states have estate recovery programs that can place a claim against the home to recoup Medicaid costs. An elder law attorney can explain how this works in your state.
What is the capital gains tax on selling a parent's home?
The IRS allows a capital gains exclusion of up to $250,000 for a single filer on the sale of a primary residence they have lived in for at least two of the past five years. If the home's value has increased less than $250,000 since purchase (or since inherited basis), your parent likely owes no capital gains tax. Consult a tax professional for the specific calculation.
How do I know if it's the right time to sell?
Consider three factors: your parent's current and projected care needs, the local real estate market, and Medicaid timing. If your parent may need Medicaid within five years, selling and spending down assets needs to be coordinated with Medicaid's look-back period. A financial advisor and elder law attorney working together can identify the optimal window.
Can a family member buy the parent's house to keep it in the family?
Yes, but the sale must be at fair market value. If a family member buys the house below market value, Medicaid may treat the difference as a gift, triggering a penalty period. Get an independent appraisal and document the transaction as an arm's-length sale.
What happens to the house if my parent has dementia and can't make decisions?
If your parent has a durable power of attorney in place, the agent named in that document can make real estate decisions on their behalf. Without a POA, you'll need to go through a court-supervised guardianship or conservatorship process before the house can be sold. This is one of the strongest reasons to get a POA in place while your parent still has capacity.