The Moving Question

Considering whether you should rent or buy a home when you retire

When your golden years appear on the horizon, it might be time to ask yourself if downsizing your home is a good idea. If that sounds appealing, you’re next consideration is whether you should rent or buy. According to CNBC, the current trend leans toward the former. In the top 10 markets for older Americans, retirees rent at a rate 1.2 times more than the national average. But does that mean you should rent, too? Here are some things to consider.

Home Equity

If you live in an area where the housing market steadily increases, you should consider buying. A solid housing market means your city is popular. A likeable city means a constant influx of people, which typically leads to steadily rising rental costs. If you buy instead of rent, you’ll avoid those rising costs and — should you need it later in life — have the ability to tap into your home equity.

Your Retirement Lifestyle

Have you always dreamed of traveling or moving around a lot during your golden years? If so, buying just doesn’t make sense. For some retirees, the freedom renting provides outweighs any benefits of owning. In fact, one recent study found that about 40 percent of older Americans said they rent because it gives them flexibility.

The Control Factor

While renting a home might allow you some flexibility, remember that ultimately, the owner of the house controls all. If they want to sell the home or increase rent every year, they can do that. And while you typically imagine renting to be free from all upkeep, some property managers require renters to do things like shovel snow or mow the lawn.

Chris O'Shea

Powered by: SavvyMoney