New Visitors Privacy Policy Sponsorship Contact Us Media
Baby Boomers Family Green Home and Auto In Critical Condition Just Starting Out Lifestyle Money
- advertisement -
Bankrate.com
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Equity
Auto CDs &
Investments
Retirement Checking &
Savings
Credit
Cards
Debt
Management
College
Finance
Taxes Personal
Finance

 

Pros and cons of renting in retirement

Page | 1 | 2 | 3 |

When home prices are rising, rents generally increase as well, Bland adds, saying, "Higher rents will decrease the overall purchasing power of renter's incomes whereas higher home values accrue to the homeowner or his or her heirs. The imputed rent rises, but the homeowner doesn't have to pay it or taxes on it."

- advertisement -

Freddie Mac, the government agency that guarantees mortgages, provides a guide to owning and keeping a home and work sheets for budgeting homeowner costs, maintaining and repairing appliances and hiring a contractor for renovations.

"Renting is generally cheaper in the short run, but there is a point a certain number of years out where it gets more expensive to rent and less expensive to own," says Dorula.

"Homeowners can tap into their equity in a number of ways, and that option isn't open if you rent."

Emotions of owning vs. renting
While the emotional aspects of renting are less concrete than the financial aspects, they are an important part of the equation. Carefully exploring your attitudes and your ability to adapt to changes going forward is a must.

"There is no one-size-fits-all," Marion says. "I recommend that seniors talk to their friends who have been through the experiences of staying in their present home, downsizing or renting to get an idea of what it's like. You also need to think about your needs going forward -- do you want freedom from responsibility, do you want to travel? That gives you a baseline to make these types of big decisions."

Renting provides more freedom, but owning provides more security. "Owning provides more control," says Dorula. "When you rent, there is always a chance that ownership of the building where you live could change hands or the property could go condo and you'd have to move. If I decided to rent, I would insist on a long-term lease."

On the other hand, if your health or your spouse's health fails, you may need to move to an assisted living or nursing care facility on short notice. "In a down market, it can be very difficult to sell a house," says Marion.

While owning a home can provide a lot of emotional security, a house isn't a liquid asset.

Bankrate.com's corrections policy -- Updated: Oct. 1, 2007
 
 
Create a news alert for "saving"
Page | 1 | 2 | 3 |
 
 RESOURCES
The single retiree
Saving after retirement
5 ways to make savings last
 TOP RETIREMENT STORIES
IRA penalty has multiple exceptions
Best times to shop for bargains
Remarriage saps Social Security benefit
 

Compare Rates
NATIONAL OVERNIGHT AVERAGES
IRA MMA 0.51%
1 yr IRA CD 0.77%
5 yr IRA CD 1.85%
- advertisement -
- advertisement -

About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here.

Bankrate.com ®, Copyright © 2014 Bankrate, Inc., All Rights Reserved, Terms of Use.