11/26/2013 5:00 PM ET|
10 reasons to rent in retirement
Retirees often need the help with maintenance and repairs that renting provides.
In retirement, you don't necessarily need a house with several bedrooms and a big yard. In fact, stairs to climb and a yard that needs mowing can become a significant liability as you age. Renters get to outsource emergency repairs and some home maintenance chores, which can make life easier as a retiree. Downsizing to a smaller apartment can also improve your retirement finances. Here are 10 reasons to become a renter in retirement.
Tap your home equity. When you sell your home and become a renter, you can add that home equity to your nest egg, which could significantly improve your retirement finances. "Selling the home and renting gives you capital that is able to produce and earn income," says Neal Van Zutphen, a certified financial planner and president of Intrinsic Wealth Counsel in Mesa, Ariz. "It costs less to rent than it does to own. There's no maintenance costs, there's no property taxes and sometimes utilities are included."
Downsize to a smaller place. Once your children move out of the house, you don't need as much space or stuff. "Downsizing to a living space more appropriate for current needs can be additionally helpful if moving from a multi-story to single-story home, i.e., eliminating stairs," says Andrew Carle, founding director of George Mason University's Senior Housing Administration.
Lower your cost of living. Retirees no longer need to live in expensive areas near the office or in good school districts. Sometimes moving even a short distance can result in a drastically lower cost of living.
Outsource home maintenance. In many rental agreements, it is the landlord's responsibility to maintain the property, including the lawn, exterior of the building and many of the appliances. You are "shifting the burden of home maintenance and repair to the landlord," Carle says. "This includes interior, but also exterior things like lawn maintenance and snow removal."
One phone call for repairs. When something breaks, you don't have to spend your day finding a person to conduct the repair or getting price estimates. You simply call the landlord or administration office and put in a maintenance request. "A lot goes wrong with older homes and that's why a lot of people want to relocate," says Debra Drelich, a geriatric care manager and founder of New York Elder Care Consultants. "You don't have to deal with it when things break – you just call the super."
Live near the amenities you use. Some retirees choose to relocate to a walkable location near stores, parks and recreational opportunities. "You can walk to things like shops or the theater," Drelich says. It can be useful to base yourself near public transportation in case you reach a point when you no longer want to drive.
Relocate near family. Retirement can be an opportunity to move closer to your children and grandchildren. "If you rent close to your family or children or grandchildren, you have less travel expenses to see family," Van Zutphen says. You can also help each other with childcare and eldercare as needed.
More flexibility. Renting gives you the flexibility to experience a new location or lifestyle without a long-term commitment. "Renting gives you an opportunity to try out a place and see what a place is really like to live in," Van Zutphen says. "Rather than buying right away, you can rent for a full year and see if you can imagine yourself living in Florida or Arizona."
Find age-appropriate features. Retirees can select apartments with amenities that will allow them to live independently for as long as possible. Features to look for include apartments with a minimum amount of stairs, convenient laundry facilities and handles in the shower. "I live in this 95-year-old house with many flights of steps, and this is not the house I am going to be able to grow older in with all the steps," Drelich says.
Extra help is sometimes available. Some senior housing arrangements allow you to live independently for as long as you are able to, and then offer increasing levels of services as you need them. "For those who are getting older, there's independent living, and then when you need it, there is assisted living and nursing homes and long-term care," Van Zutphen says. Many senior communities also offer the added bonus of social activities for residents and a chance to make friends.
More from U.S. News & World Report:
VIDEO ON MSN MONEY
Selling your house, cashing out, investing in Bernanke's wall street casino to boost your income, and renting. That is the stupidest retirement plan I've ever heard.
I lived in rental property and couldn't stand some of the idiot neighbors that I was forced to put up with. I bought and sold 3 different houses until I found my present home where my neighbors are far enough away that I have my privacy. Renting and living in tight quarters is not something I ever want to do again.
no way would I give up my home, after 40 plus years of working, I owe nothing 0 debt.
why would I want someone on the other side of some sheetrock?
Plus I live lake front and enjoy my fishing and the boat right outside my back door.
I am 77 years of age. My son and daughter in law talked me into selling my home and moving near them in another State. Biggest mistake I made in my life. Proceeds receive zero to 1/2 % is all the banks are paying. My rent costs me 75% more that it cost me to live in my home. My home expenses were my R.E. taxes, snow removal, lawn mowing, heat, electric, water and fire/ and liability insurance
were only 1/4 of what I have to pay in rent. I had recently restored my home 100%. I could have lived there for the rest if my life and wouldn't have to had to spend a dime as it was all maintenance free.
Perhaps replace the furnace if I lived to be 97. I purchased my home in 1967 for $6000. and sold it for $106,000. Plus being older than 65 I could have received some Homestead Tax Relief. Low income, I could have also received a heat subsidy also ....both of which I choose not to use when I lived in my home. Plus the factor of living in housing for Seniors isn't all what it is played up to be.
The land lords never mention having to live with 200 cantankerous women who led their wives around for 50 years and try to do the same to their neighbors. Oh another thing they all sleep with their dogs and cats. Dog piss on the carpets and defecate anywhere outside. So there isn't even a nice fresh patch of green grass you can put your lawn chair outside and enjoy the weather. Oh and another thing the landlords don't tell you they set the automatic washers with little or no rinse cycle to save on their water bill. Pathetic....and wishing I could turn the clock back and living in my nice clean comfortable home.
Not a lot there to make one change their mind to keep their house. Even if house not paid off, rent where I live is higher than my house payment, which includes taxes and insurance. Let alone, that more likely than not, the house will grow in value, even if only minimal. Not much to think over for me. I'm retired, and checked things out. My house was not paid off when I retired, due to 3 job transfers to other cities in 15 years. No, it was cheaper for me to keep my house and try and build more equity. This article reflects the thinking of all who bought up foreclosures and hope to rent them and make a nice profit.
Might be easier to dispose of those pesky old people if they don't own property.
Sounds like The Ministry of Propaganda may have a new directive after the campaigns to stop PSA tests, colonoscopies, breast exams,; not to mention the Medicare cutbacks, and the ever popular death panel program. There were daily stories about retiring to another country, now we get sell off your property?
Waited my whole life to be old and this is what I get?
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Tired of your wallet taking a beating at the grocery store? Here are some creative ways to save big on food costs.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'