Many argue it’s best to own a home in retirement instead of renting one. But there are exceptions.
When Renting Makes More Sense
There are situations where signing a lease beats a mortgage — even during retirement.
Ask Sally Gavin, a recently retired teacher who, with her husband, sold a house to move into a rental apartment building.
“We don’t need a five-bedroom house anymore, and we weren’t ready to make a commitment for a condo,” she said. And they’re not sure when, but the couple will likely eventually relocate to Austin, where their son lives. In the interim, they decided to live in a “fun” place, where they could walk everywhere and have easy access to all the cultural attractions downtown has to offer.
When Flexibility Rules
Renting a 2 bedroom apartment in Ridgeland, SC affords flexibility. And that flexibility is a big reason retirees turn into renters — at least for a while. Retirees may rent to try out living in a new location. Or they can rent to see if they like being snowbirds, spending the colder months where the weather is warm.
Flexibility is also helpful when financial or health situations change, requiring a move to a less expensive place, to a place closer to family, or to a care facility, said Tammy Kotula, spokeswoman for Apartments.com. Renters don’t have the burden of selling a home should those issues arise.
Plus, apartment living comes without some of the hassles of homeownership, said Lauren Boston, staff writer for the National Apartment Association, in an email interview.
“Many retirees are looking for the same experience as that of their Millennial children or grandchildren — they want to live in an all-inclusive place where they don’t have to worry about maintaining a home,” she said. What’s more, renting an apartment might be best for those who want to be within walking distance of cultural activities, stores and restaurants, Boston added.
For those with insufficient retirement savings, renting could also be a good option, said Kevin R. Worthley, a financial planner in Rhode Island and vice president of Wealth Management Resources. Instead of tying up money in a house, an asset that typically appreciates at a slow pace, some might be better off renting in retirement and considering other alternatives for their money, he said.