Renting Vs Owning A Home In Retirement
When retirement hits, many people face a question: should they rent or own? The answer depends on your new lifestyle and needs. There is no one easy answer, so it’s a good idea to consider both options to find the choice that is best for you.
Check out the pros for renting vs owning and see which option lines up the best with your financial and lifestyle needs and dreams.
Pros For Renting A Home
There are plenty of pros for renting a home in your retirement years! If you view retirement as a chance to be free of responsibility, travel, and explore different hobbies and possibilities, then renting might be the ticket to help you fully exploit your retirement years and embrace this time in your life.
Flexibility To Move Anywhere
If you’re renting, you’re not tied down to any place. If your kids live in different cities, you can move to live closer to one child for a few years and then another for a few years, spending quality time over your retirement with your family. Or, if you want to experience living in different parts of Canada, you can! The world is your oyster when you’re renting, as long as you’re paying attention to your budget and finding accommodations that fit within it.
Travel
One of the best parts of retirement is the freedom to travel. When you’re renting, you don’t have to worry about cutting your travels short to check in on your place (or hire someone trustworthy to watch your place for you while you’re gone). If you’re renting, you can travel stress-free with zero responsibility weighing on you.
Repairs and Maintenance
Houses require regular maintenance and will require repairs over the years. If you own a home, you’ll be spending both time and money maintaining it. If you’re not someone who finds joy and satisfaction out of puttering around the home and would rather be spending that time, energy, and money on travels or family, then renting is a better option for you!
When you rent, it’s up to your landlord to maintain and repair the home, so you don’t have to worry about maintenance issues.
Unlock Capital For Investing Or Travel
If you currently own a home and are considering selling it to rent in your retirement years, you’ll be unlocking capital! You can invest that capital as a nest egg for later in your retirement, or invest so that you have regular dividends coming in. You could also use that capital to go see the world if you know that financially that is a decision that you can make.
Housing That Suits Your Needs As They Change
Your lifestyle might change quite a bit throughout your retirement. If you’re renting, you have more flexibility to choose housing that suits your needs. Maybe at first, you’ll want to rent a large place so that you can still host family celebrations and then later you want to downsize so that there is less to clean and take care of so that you can spend your time travelling and getting out of the house. Then, maybe, you want to rent a place that has fewer stairs and is more accessible. Perhaps after that, you’ll want to live in a more senior community. If you’re renting, those transitions are easier.
Pros For Owning A Home
There are so many pros for owning a home when you retire. For those who are homebodies and are looking forward to spending more time enjoying their home, and feeling financially secure and stable throughout their retirement years, owning might be the best option for you.
Income Possibilities While You Travel
One option for those who own a home but want to spend a chunk of their retirement years travelling the world is to rent it out. This will allow you still cover the mortgage, increasing your equity, while you’re away. Or, if you are mortgage-free, it allows you to have additional income coming in, funding your travels.
Renting out your home will require you to be a landlord, which means that you’ll have to be available for repairs or issues, but with today’s technology, most of that can be handled remotely by hiring people. Or, if you’d prefer to not have that stress, you can always hire a property manager to manage your home for you and act as the landlord in your place (which is a better option if you’re already mortgage-free because then the rent money can cover that cost and then some).
Fixed Cost Of Living
The cost of rent can increase each year. If you’re on a fixed income, those increases can be troubling for your budget and can impact your standard of living. The rental market isn’t always a stable one. When you own a home, you know how much your mortgage is and are locked in for set amounts of time at that price. If you own your home, then you’re only paying your property taxes, which is also better for your budget.
Owning a home means more security in planning out how far your money will go throughout the years.
Equity To Tap Into When Needed
When you own a home you have equity. There are options where you can tap into that equity if the need should arise. There is also the peace of mind that comes with owning your home throughout your retirement that if anything should happen to you, you could always sell your home and have that money to use. It’s like having a safety buffer that you’re paying into each month (or have paid into and now fully own).
Personalization
If you’re a nester, then owning your home might be better for you in retirement. Renting has restrictions on the kinds of changes you can make to the place where you live. If you’re handy and enjoy taking on projects in the home, you might miss this when you rent, as they might not want you installing a deck off the back or creating built-in shelving for the living room.
When you own a home, you have free reign to design and customize your home as much as you’d like. If those kinds of DIY projects are something you think you’d enjoy in your retirement years, then owning feels like a good fit.
Something To Pass On
For some, the idea of having a house that you can pass along to your children is very appealing. Obviously, if you’re renting, that option isn’t there. If you picture your retirement years hosting family dinners and maintaining a home that you want to someday pass on to your children, then owning is better suited for your dreams.
Final Thoughts
Your retirement should be exciting! Don’t stress over whether renting or owning is a smarter or better choice. The truth is that both options have their advantages. It’s really just about trying to figure out what you want for your retirement years and choosing the option the best suits those dreams.
