Home Sweet Home: Is Renting the New Owning?

Screen Shot 2024-04-11 at 3.33.40 PM

n retirement, many people opt for a change of scenery. Whether it’s a beach condo, a mountain cabin or a bustling city apartment, they embrace change and are on the move. When it comes to housing after retirement, many are turning to renting rather than owning a house. Even if owning a house is affordable, renting is seen as a savvy financial decision for retirees under certain circumstances. The flexibility and freedom from responsibilities and expenses of home ownership that come with renting is a big reason why many retirees are looking for properties for rent, according to insights from AARP and NerdWallet.

In terms of flexibility, renting allows you to come and go as you please. You are not tied down to a specific location or property, giving you the freedom to explore different areas, live closer to family or simply switch up your surroundings whenever you feel like it.1

A significant financial advantage of renting is the elimination of maintenance costs. If the roof springs a leak or the boiler breaks down, you can sit back and let your landlord handle it.2 When it comes to making renovations, renting can offer ramps, elevators, one-floor living and more, while potential costs to renovate a home for your physical needs can range from a few hundred dollars to $50,000.3

Selling your home can give you a large chunk of cash to cover rent and other extra expenses. This money could also be reallocated to help provide an additional income stream during your retirement.4

However, renting isn’t always the right financial decision. As a renter, you have little control over annual rent increases, which can make budgeting a bit more challenging. AARP states, “From April 2019 to April 2023, the median cost of an apartment in the United States went up by more than 20 percent, from $1,619 to $1,967, according to Rent.com, a listings website.”5

When you rent, you don’t get to benefit from any increase in the property’s value over time, and while real estate isn’t always a surefire investment, historically, home values do tend to rise over time.

There’s also an emotional aspect to consider. Many people find that owning a home provides a sense of stability and security that renting can’t quite match.6

Deciding whether to rent or own in retirement is a personal decision that should consider your financial situation, lifestyle preferences and future plans. Renting can offer flexibility, lower maintenance and renovation costs, and the opportunity for extra funds. But it also comes with uncertainties, like potential rent increases, and it lacks the investment potential of homeownership. On the other hand, owning a home can provide stability but the upkeep can be much harder over time. In the end, it’s all about what suits your needs the best.

Learn more about your current financial status and how you can achieve your retirement goals with our ‘No Obligation, No Cost’ Five Step Retirement Review.

Our financial planners have wide knowledge in South Carolina Retirement System as well as experience in retirement planning. sc tax rebate, etc. Contact us today!

Ready to Take The Next Step?

For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.

Or give us a call at (803) 798-1988