If you’re retired (or approaching retirement age) and you’re considering moving, you might be weighing the pros and cons of buying vs. renting a new home. A variety of factors can influence the decision to rent or buy; including your budget, the location you’re moving to, your lifestyle, and your personal preferences.
Rental or mortgage costs are often the most significant budgetary concern of adults in any age bracket, and there are many important things to consider before making this big decision. it’s important to make a decision that will leave you feeling financially secure, as well as happy and comfortable in your home environment.
Here are a few things for you to consider before making a housing decision:
Budget
Concerning planning your budget, renting has some serious advantages. Since most or all of your maintenance costs are covered by your rent, preparing a month-to-month budget is extremely easy with a rental property. For individuals living on a fixed income, such as retirees, renting can guarantee that you easily stick to your monthly budget without any additional surprise repairs (such as roof repairs, new garbage disposals, broken refrigerators, etc.).
However, a monthly mortgage is often cheaper than rent. If you’re a handy individual that?s not intimidated by arranging home repairs, the extra money saved with a mortgage might be well worth it.
Renovations
Owning a home allows you to customize your environment to match your personal needs. This can be important for enjoying your home environment, and it can also be an essential quality of life issue for senior citizens. For those of us that are getting older, we often like to incorporate renovations that make day-to-day life more comfortable (such as grip-bars, handicap showers, wide doorways, etc.).
While some upgrades might be possible on your rental property, you’ll be at least partially restricted in what renovations you’re able to implement. If you’re interested in making significant modifications to your home, you might be more comfortable with buying a property.
Downsizing
Retirement is often an excellent time to downsize your living space. Whether renting or buying, many seniors use retirement as an opportunity to downsize. Depending on the area you’re living in or moving to, renting might offer you the chance to fit into a smaller space than what is available on the market. If there are no town-homes or small properties available in the area, you’re looking to move, renting a small one or two bedroom apartment might be a smarter option.
Flexibility and Lifestyle
Before buying a property or signing a long lease, you’ll have to decide for yourself the type of lifestyle you want. Renting offers the opportunity to move after your contract is up quickly, and this might be an ideal situation if you’re new to an area. Also, individuals that are trying to travel for large portions of the year might feel uncomfortable leaving a home that they own, but they won’t be concerned about leaving behind an apartment they rent.
Conversely, if you know exactly where you want to live for the rest of your life, or at least the next ten years, buying might be the better option for you. This is usually the case if you’re moving closer to family, and you have an idea of where you’ll be staying for the foreseeable future.
Personal Preference
For some people, owning your home provides peace of mind. You have to decide for yourself if owning your home is essential for your emotional security or enjoyment. Many people take pride in their homeownership, and it’s important to keep these kinds of preferences in mind when making any long-term housing decisions.
Long-Term vs. Short-Term
Some individuals argue that renting is a waste of money because you don?t own any equity in a rental property. There is some truth to this statement because homeownership can be a valuable investment if you make a smart purchase. However, there are many short-term costs associated with buying a home, and it can take years to recuperate many of those costs. Further, it’s not always a great time to buy a house. If you buy while market prices are high, then it might take many years to profit from your investment.
That being said, houses can make for significant investments. This is especially true if you buy while housing prices are low, and you plan on owning a home for many years. Plus, owning a home gives you a substantial investment to bequeath to your family.
The Choice is Yours
There are many things to consider when moving into a new home, especially if you’re approaching retirement. it’s important to remember that both renting and buying can be good options, and only you can decide what the best decision is for you. Regardless of what you choose, be sure to make the decision that will leave you feeling financially secure and comfortable in your own home.
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