5 Reasons to Consider Renting in Retirement
Last Updated on March 8, 2023
A growing number of older adults are renting and here’s why. Renting in retirement as given older renters the flexibility to travel freely during their retirement years, along with the convenience of not having to worry about maintenance or repairs.
While there are some downsides to renting, such as the potential for rent increases and the lack of control over one’s living environment, ultimately the decision of whether or not to rent in retirement depends on your specific goals and your personal finances.
We’ll cover the benefits of renting in retirement and how to weigh the decision in your retirement planning.
Renting vs. buying in retirement
When comparing the costs of renting vs. buying real estate, it’s important to remember that if you sell your house, you can invest the proceeds to provide some cash flow during retirement.
You can calculate your expected monthly return to determine if renting makes sense financially. For example, if you have $750,000 of equity in your home, then a 5% annual return would provide you with about $3,125 in retirement income every month. If you can rent for less than that where you want to live, renting won’t set you back financially compared to homeownership.
You’ll also want to consider your goals and preferences. For example, if you want to live near family members for part of the year while having the freedom to vacation somewhere warm during the winter, renting in retirement may allow you the most flexibility. And if it’s a lifestyle goal to cut back on housework, renting an apartment may significantly reduce your chores.
On the other hand, if you want to stay in your home, there are other ways to access your home equity when social security benefits won’t cover your expenses. A reverse mortgage is one option, but keep in mind that it comes with upfront costs. Downsizing is often a better choice if you’re already struggling financially.
5 reasons retirees should rent
1. Renting gives you the freedom to move and travel
Renters have more flexibility to move than homeowners. This can be a significant advantage, particularly for seniors who may need to move for family or medical reasons.
It can also be advantageous if you want to travel, as you won’t have to worry about your home while you’re gone. You can jet off to Florida without winterizing your home, for example. Plus, you’ll be able to use cash from your home equity to dine out and visit museums wherever you choose to explore.
2. It’s cheaper to rent than buy in some desirable locations
Renting in retirement can offer seniors the opportunity to live in a desirable location without the cost of ownership. When you own a home, you are responsible for the mortgage, property taxes, homeowners insurance, repairs, and maintenance costs.
In many desirable cities, it’s cheaper to rent than to pay all these housing costs. For example, if you want to live in Austin, San Francisco, or New York, you’ll find it’s cheaper to rent than to buy a home in these locations. Mortgage payments in these hot urban areas exceed monthly rental costs.
3. Renting in retirement frees you from maintenance or repair duties
When you own a home, you are responsible for all maintenance and home repairs, both big and small. This upkeep can be time-consuming and physically demanding, and if you’re not handy, it can be expensive to hire someone to do the work for you. Simple tasks like changing a lightbulb or unclogging a sink can become difficult as you age.
When you rent, your landlord is responsible for all home maintenance and repairs. This means that you don’t have to worry about unexpected repair bills or spending your valuable time on home improvement projects.
4. Renting makes estate planning easier
Selling your home helps streamline the estate planning process. Your children won’t have to argue over what to do with the family home after you pass, or deal with the stress of the sale during an emotional time. Furthermore, renting gives you an opportunity to downsize and go through your belongings, so you’re not leaving that daunting task with your heirs.
5. Renting in retirement may provide better accessibility and assistance
A house with a staircase may be fine for a young family with children, but as your healthcare needs and physical abilities change, so do your housing needs. A smaller home means less hassle, with fewer bathrooms to clean and fewer risks to your physical safety.
To get assistance with daily tasks, you may also choose to rent in an assisted living community or retirement community. Many of these communities offer the independence of living in your own apartment with the safety net of on-site staff.
Find your next home with Dwellsy
Once you decide to rent in retirement, you can enjoy searching for your dream home on Dwellsy. Whether you’re looking for a small cabin in the woods or a seaside, first-story condo, Dwellsy can help you find a rental home that fits your budget and your needs.
You can filter your results to senior communities for people ages 55 and older and narrow down your choices even further by selecting the amenities and features that are most important to you.
Find your next home today with Dwellsy.