What to Do With an Empty Nest

Do you hear that? Listen closely. It’s the sound, or lack thereof, of an empty nest. The kids have grown up and started a new adventure. Your home, once full of fluttering or thundering footsteps, is much quieter these days. You may have complicated feelings about that.  

But right now, we’d like to congratulate you on a mission accomplished! You’ve weathered the ups and downs of parenting, sent your beloved child out into the world, and now, you have the freedom to define this next phase of your life.  

That freedom, though, can be daunting, and reframing your mindset to focus on your needs can take some time. As you start planning for what’s next, consider some of these options as jumping off points for a future that’s all about you.

Aging In Place

Not every empty nester is eager to leave their old home behind. Those walls are rich in memories, good and bad, and you may want to preserve them. Whether you’re retirement age or not, now would be a good time, to think about how this home can fit your needs in the next phases of your life.  

Considerations for Older Homeowners  

If you are in or near your 60s, you may want to consider some of the following questions about your home:  

• Should you move your bedroom to the ground floor? 

• Can your bathrooms be updated to prevent injuries from falls? 

• Can you declutter to create more space to move safely?  

• Can you improve your lighting? 

Essentially, as you get older, you may want to equip your home with more safety and accessibility features to help you maintain your health and independence.

Considerations for Middle-Aged Homeowners

Middle-aged homeowners may not need to make those changes too urgently—though they could be worth keeping in the back of your mind while you’re reassessing your home. If you love your home, but there’s always been that one thing that’s made it less than perfect, now is the time to make that happen.  

Maybe you’ve always wanted a home gym or a craft room. You might even set your sights on a bigger project like a new guest suite or a closed-in porch. If you’re feeling ambitious, you might finally try to finish your basement. Regardless of what project you pick, there are financing options to consider to make it a reality.

Financing Your Renovations

Depending on your financial situation and the equity you’ve built in your home, there are a variety of options to finance your empty nest projects. One potential path is a cash-out refinance. This would replace your current mortgage with a new one and let you access cash from your home equity.  

Borrowers could also keep their current mortgage and access cash from home equity through a new second lien mortgage. Both are valid pathways to tapping your home equity for cash. Whichever you choose depends on your circumstances and goals. For example, if you have a low rate on your current mortgage, you might not want to refinance.  

Personal loans, such as The Federal Savings Bank’s SMART Loan, can also help you get your projects over the finish line. Once you know what your project entails, work with a lender to determine your available options, along with their risks and benefits.

Renting Out Your Space

Another attractive option for empty nesters is turning their home into a rental or renting out a room in their home. This may also require some renovating to ensure your property is safe and appealing for renters. However, this is a smart option for those who want to earn a little extra income from the space they have available. Similarly, you may be interested in moving but keeping your old property as a rental.  

You can use the rental income to fund things like travel, to put money toward your new mortgage, or just to save more for retirement. If you don’t have experience in property management, it may be wise to hire a property manager to handle the administration of your rental.

Downsizing

You could also reach the conclusion that your current home has given you all it can give, and that it’s not really suited for your next steps. Downsizing is a common choice for empty nesters, in which they move into a smaller, sometimes less expensive home or condo.  

One of the potential benefits of downsizing is that—depending on where you buy, current mortgage rates, the size and condition of the home and other factors associated with the purchase—it might help you reduce costs via lower mortgage payments, utility bills, and less maintenance. Of course, cost savings aren’t guaranteed in the short or long term, but that is a very common goal people have when downsizing.  

It can also help you feel more comfortable in your home with less empty space to fill. A smaller home in good enough condition could help you spend less time and energy on chores and upkeep, too. If your goal is to live a simpler lifestyle, downsizing might help you do that.

Build Your Dream Home

You’ve been pulling out all the stops for your family for years. Maybe this is the right time to do it for yourself, too. Instead of settling for whatever home the market has available, you could build your dream home with the help of a construction loan. This gives you the flexibility to create your ideal home, whatever that means to you.  

Construction loans can be used to finance a variety of home types including:  

• Stick built: These are also known as site built. This is the most customizable type of home build, and likely what you first imagine when considering this sort of project. You would build a home on site, piece by piece.  

• Modular home: These are homes that are manufactured in a factory and transported to the site where they will be built in sections or modules.  

• Log home: If you’re the rugged, outdoorsy type, you could potentially use a construction loan to build a log home.  

• Manufactured home: These are built entirely in a factory and transported to the site to be installed permanently. People often call these mobile homes, though there are legal differences between the two.  

Note that you can also use certain construction loans to finance larger renovations.

Final Thoughts

Being an empty nester comes with some complicated feelings and decisions. But after all you’ve done for your family, you’ve earned the opportunity to make this next choice about yourself.  

Take some time to reflect on what your home means to you and what you need from it in this next chapter of your life. You can work toward the home you want and still make it a place your kids are excited to come home to.  

If you decide that you want to renovate your home, move to a new one, or build one from scratch, work with a trusted lender to figure out what options you have available.