Should Retirees Rent or Own?
Retirement is a time of huge transition, but it also provides the opportunity to create a whole new lifestyle. Whether a retiree chooses to rent or own their living space has a lot to do with how they envision that lifestyle.
One of the biggest motivations for retirees who decide to sell their homes and move continues to be a desire to be closer to family, especially when grandchildren are in the picture. In this case, most people choose to buy a home and reinvest their previous home equity.
Other retirees, especially those who recently retired, may want to be free to travel. This option has been on the rise as the Baby Boom generation is retiring in record numbers, a factor that has led to a huge increase in the popularity of “lock and leave” leasing communities.
Is it better to rent an apartment or house, or to own a home?
The type of amenities and activities a retiree engages in are also a big factor in choosing whether to live in an apartment or a single family home. Baby Boomers are reluctant to consider themselves as “seniors”, and increasing number are seeking more urban, walkable communities where they can enjoy art galleries, coffee shops and live music all within walking distance.
Others prefer outdoor pastimes like golf or fishing, and in that case, a single family home near a golf course or lake is the best option.
What factors should they consider?
In addition to family, travel and amenities, a primary reason for choosing whether to rent or own when you retire has to do with finances.
When considering buying a home, here are some questions to ask:
- Is the area I am considering purchasing a home in projected to continue to grow in the next few years?
No one can predict the future, but if an area has a solid or growing job market, chances are homes will continue to increase in value.
- What is the tax rate and how are property taxes assessed?
Understand not only what the percentage of the home’s value is being taxed, but also how often they re-assess and how tied is it to the market value? It’s possible to pay cash for a home but still have a hefty payment when taxes are due.
- Do I need the equity from the sale of my current home to fund my living expenses in retirement?
Consult with a trusted financial advisor and/or CPA to see whether renting or owning is the best financial option for growing the equity from the sale of a home.
Finally, seek advice from a real estate agent experienced in working with downsizing home sellers. They will have additional resources and expertise to guide mature home owners to the right next lifestyle!









