Should you rent or own your retirement home? Pros and cons of each
Feb 27, 2012, 6 a.m.
Moving to a sunny or more desirable locale is one of the things many people look forward to as they head towards retirement. However, finding a place to live in your new home brings with it the old dilemma of whether to buy or rent. And, being of retirement age adds a few extra things to consider when making that decision.
Renting a Home
Renting a retirement home has several advantages over buying one. Most of these benefits apply whether you are 30 or 60. Renting allows you the freedom to take off and move again in a few years if the place you've chosen for retirement doesn't suit you. A retirement rental also saves you the time, worry and money associated with maintenance and repairs. If something breaks, you simply call the building manager.
However, with the freedom to move at will comes the insecurity of knowing that your apartment building or rental home could be sold at some point and you could be required to move out. You also may be limited in a rental as to what you can do to customize the home, such as paint colors, wallpaper and even adjustments to make the unit more accessible like tub bars and rails.
Owning a Home
Opting to buy a retirement home has its own advantages. First and foremost, you have the security of knowing that as long as you pay your mortgage and taxes, no one can sell your house or ask you to move out. Owning a home also allows you to build equity to fund your later retirement years or to leave to your heirs when you die. In most areas, you'll also find a wider variety of homes for sale than are offered as rental properties.
The downside to owning a home is that all expenses are the responsibility of the owner as is the maintenance. Raking leaves and cleaning the gutters may not be a problem when you're 60, but do you really want to be doing those chores in 20 years? Will you be able to find adequate yard help in a retirement community?
The decision to buy or rent is a very personal one and depends on a variety of factors, including your age at retirement, whether you have family and if they are in the area where you'll be retiring, and the housing market in your new home city, just to name a few. Only you can decide what's right for you.
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