Should I Buy Or Rent A Home During Retirement?
The thought of growing older and retirement can be overwhelming to some. As the body begins to age, things like routine home maintenance are not as easy as they once were. It is estimated that homeowners will spend about one to four percent of their annual income on household upkeep. When you are no longer able to cut the grass, repair clogged drains, and service the water heater, then you will likely need to call for professional assistance. All these little expenses have a dramatic impact on your already strained budget. With that in mind, some seniors are choosing to rent rather than own.
The Beauty of On-Call Free Maintenance
There are apparent benefits to owning a home, even if you must pay someone to take care of routine maintenance. You must consider that a mortgage payment comes with taxes and insurance that must also be figured into the equation. A renter can merely pick up the phone and have assistance quickly and without any additional costs, a homeowner is required to do planning. If your budget is already stretched thin, paying for household maintenance may be out of the question.
The Lucrative Tax Write-Off
Some people want to own a home because it gives them a nice tax write-off at the end of the year. Yes, that write-off is very helpful when you pay insurance and mortgage interest. Arguably, it is not the best option for everyone. Those who have a steady stream of income from investments and other sources during retirement may benefit from the write-offs.
Selling a Home Is A Daunting Task / Leases Can Be Easily Broken
Owning a home ties you to one location. If you have children scattered all over the country, you may choose to move closer to one of them. Should your health take a turn for the worse, selling a home can be a significant burden on your family. A rental can easily be re-rented, and there are no lasting financial repercussions to bear. Debatably, a mortgage does give the family options should someone want to take over a childhood home.
Weighing the Pros and Cons
It appears that renting has many advantages that come along with flexibility, no maintenance costs, and the ability to move with ease. Yes, owning a home also comes with benefits to ponder. When the house is paid off, the costs of insurance and maintenance would be a small price in comparison with the cost of rent. Keeping a home in the family that has been around for a long time has a sentimental factor that cannot be ignored. Should you become cash-strapped in the future, you have the option of a reverse mortgage or taking out a home equity loan. These two options are not available to renters. Some fear that renting is throwing away good money that could go towards an investment.
Every situation is different, and the dynamics of that situation certainly come into play. True, having a home to pass down to the children is a noble gesture, but it is not always feasible. A home provides stability both physically and financially as well as a great deal of upkeep and planning. A rental gives the ability to move into a nursing home or assisted living facility with ease. Before considering the right option for you, it is essential to review all the intricacies of your situation and decide based on the finances and your overall health and well-being.