Rent or Buy: What's the Better Option for Retirees?

Some may assume that retiring means shifting away from homeownership and setting one's sights on rentals; however, this isn't true for everyone. Although owning a home earlier in life can provide a more stable environment for a family and contribute to overall financial well-being, there are benefits in retirement as well. Here's what to consider when deciding whether homeownership or renting is the right choice.

Retirement Goals 

Before deciding which option is ideal, retirees should take into account their personal goals for retirement. They should consider their plans for travel, mobility, and the accessibility and convenience of their home later in life. As most retirees remain in one city throughout their retirement, homeownership can provide a "home base," and a permanent location for themselves and their loved ones to rely on and visit. Additionally, many find fluctuating rent prices, noisy buildings, and renter's fees increase their stress.

Current Home Equity

It's impossible to know whether renting or buying is better without considering financial aspects, such as whether it's worth tapping into home equity for income. Those with reasonable tax rates and affordable mortgages may find that choosing to stay in their current home is the best choice financially. For those whose home is paid off, or close to it, selling and purchasing a home in their desired location or community may be much easier. Retirees who recently purchased a home or who are still paying high taxes and large mortgage payments may benefit from selling and downsizing to prevent a significant money loss in the long run.

Buying or Renting After Selling

For those who do find that selling their previous home is the right choice, the question of whether to rent or buy their next home must still be addressed. Retirees should consider how long they plan to live in the home they may purchase. For those who plan to stay in the home for 10 years or longer, as most retirees do, buying is likely the better option. They may also consider purchasing or building a home as a type of investment to pass on to their children, whereas rent money simply goes into a landlord's pockets.

Home Ownership Fit for the Retiree Lifestyle

The decision to buy a new home is significant in itself, but even more significant is the kind of home to choose. If retirees want to spend their golden years without the worry of maintenance and upkeep, then condominium-style living may be their best option. Condos offer a sense of community and convenience with the advantage of ownership.

If you're considering purchasing a home or condominium as part of your retirement plans, contact us online or call Robertson Homes at (248) 657-4968. Our team would love to help you find a home to enjoy during your golden years of retirement.