Should I Rent Out My Home to Pay for Care?

Two separate rules apply

Renting out a home while its owner needs long-term care Medicaid runs into two different Medicaid tests at once: the income limit (does the rent itself count as income?) and the asset limit (does owning income-producing property count as a countable resource?). Both matter, and they're evaluated separately. See American Council on Aging — How Rental Properties Count Towards Medicaid's Income Limit.

The income side

Rent payments received are counted as income toward Medicaid's income limit. For 2026, the Nursing Home Medicaid / HCBS Waiver income limit is generally around $2,982/month for a single applicant in most states. However, Medicaid allows specific deductions from gross rental income before counting it — mortgage interest, property taxes, insurance, and reasonable maintenance and management costs are typically deductible, which can substantially reduce the "countable" portion. If deductions exceed the rental income, the property may generate no countable income at all in a given month.

The asset side

A home that's no longer the applicant's primary residence — because someone else is renting it — generally loses the automatic primary-residence exemption, which raises the risk that its value becomes a countable asset. There is a narrow carve-out: under Social Security's resource-exclusion rules (which Medicaid generally follows for this purpose), income-producing property can have up to $6,000 of its equity value disregarded if the property produces a net annual return of at least 6% of that excluded equity. See SSA POMS SI 01130.000 — Resources Exclusions. Beyond that carve-out, the property's remaining equity is typically countable once it's no longer the applicant's home.

Why families consider this path anyway

Renting can make sense specifically when there's a strong reason not to sell — a desire to preserve the home for an heir, a temporary care situation with a real intent to return, or a market where selling quickly would mean a below-value sale. It's a narrower and more operationally demanding option than selling outright: someone has to manage the tenancy, handle repairs, and keep records of income and deductible expenses for the Medicaid caseworker.

The long-distance caregiver angle

For adult children coordinating a parent's home from far away, becoming a landlord adds an ongoing management burden on top of everything else — screening tenants, handling repairs, and staying compliant with landlord-tenant law in a state where they don't live. In practice, most long-distance families find that selling or a reverse mortgage creates less ongoing logistical load than becoming a remote landlord, unless a local property manager or trusted family member is already available to handle it.