Renting Versus Owning In Retirement

Renting

Once you are retired, you might start wondering if your current housing situation is the most desirable in terms of financial effectiveness.

Renting could be less expensive and could allow you more flexibility.

On the other hand, owning a home provides equity and assurance.

Therefore, when considering renting versus owning in retirement, it is important to take into account the advantages and disadvantages of each option.

So, make yourself comfortable and read on for a list of pros and cons that will help you figure out what is best for you.

Pros and Cons of Renting Versus Owning In Retirement

Renting Pros

Even if you have paid off your mortgage debt, renting could be more beneficial for you. Here are a few perks of being ownership-free:

You won’t be concerned about growing maintenance costs or urgent repairs anymore. Your rent will be the only notable expense you have to take care of.
Renting is generally cheaper than buying and it could be the smarter option for you, once you are retired and rely on a fixed income.
Renting gives you more freedom. You can pack your bags and move wherever your heart desires without going through the whole process of selling. Who says you can’t have your greatest adventures over the age of 65?

Renting Cons

However, it is worth taking a look at the other side of the coin as well.

No ownership means no equity. Your rent installments are a constant expense with no prospect of a financial return in the future.
Your rent could eventually go up and put you in a position where you have to leave. And that could be both costly and exhausting.
Although you don’t have to pay for maintenance and repairs out of your own pocket, waiting for your landlord to fix your sink or window panes could take longer than expected. Thus, it could actually cause you more inconvenience and additional stress.

Owning Pros

Despite being more expensive, home ownership can also offer some significant advantages:

The equity from your home ownership can help you out when the going gets tough, through a reverse mortgage or a line of credit.
Most homeowners in retirement have paid off their mortgage. This means there is a really good chance you won’t have to worry about any payments, as opposed to renting.
You can leave something of value to your children and grandchildren. A property is an asset that could be profitable for the generations to come.

Owning Cons

On the negative side, there are some inconveniences that come with homeownership, too:

Maintenance is your responsibility and could be quite expensive. Not to mention that dealing with major repairs in your senior years could bring additional physical and mental pressure.
Taxes and insurance won’t disappear. And they tend to rise over time which could pose financial difficulty when you live off a fixed income.
You never know what the value of your property will be in the future, especially in the unstable market conditions. Thus, leaving it behind to your heirs may not be as profitable as you hope.