While the decision to either rent or buy is more commonly associated with people in their twenties or early thirties, it is also a question baby boomers must ask themselves when planning retirement. While a good majority of individuals simply stay put in their homes, and yet others decide to purchase smaller ones, there has been an ongoing trend of baby boomers deciding to rent instead.
There are many reasons to rent, and sometimes these benefits outweigh those of other viable options. Below you can discover the two primary reasons in depth, as well as look over a comprehensive listing of other key benefits.
Financially Equivalent to Purchasing A Home
While upscale condos and extraordinarily large houses in the city are much more expensive than buying a home in the suburbs, a typical rental of an appropriate size for baby boomers is financially equivalent to purchasing a home. The difference is that purchasing a smaller home requires more money upfront, whereas the cost of a rental is spread out over time.
Baby boomers can find one and two bedroom rentals at a reasonable price by opting to stay just outside of the city limits or, at the very least, a short walk from downtown. Rentals located in the heart of the city are much more expensive than other, just as viable options.
Repairs Are Put on Someone Else
With a rental, the cost and effort of repairs should something go amiss are placed on the landlord. As baby boomers climb in age, this can be very important for two reasons. The first, most obvious reason, is that people may not get around as easily as they used to. Tackling repairs could not only be time consuming and exhausting, but downright unsafe. This can be an especially appealing benefit for those without children or grandchildren nearby to assist them.
The second reason is simple: having a landlord take on repairs is much more cost-efficient. Unless you purposefully destroyed something – which is highly unlikely – the cost and effort are placed on the landlord. They are also required to have repairs made within a reasonable amount of time, so baby boomers are assured the work will be done, and without the hassle of constantly bugging the repair company.
Bonus Benefits of Renting Over Purchasing
- Live closer to downtown without paying a small fortune
- Often at close proximity to others, allows seniors to easily create and maintain social networks, which are vital for mental health
- Often, rentals are located closer to doctor’s offices and hospitals, thus decreasing commute times
- Renting can be temporary for those who aren’t sure if they’d like to sell their family homes yet, or who are unsure if city life is well suited to their lifestyles.
- With renting, aging individuals can move closer to family whenever needed. They are not tied down to one specific home.
- Renting allows for a smaller down payment, thus opening a sizable portion of the sold home’s assets to be invested. This can create a larger income moving forward.
Things to Think About
With the financial difficulties that Coronavirus has caused, there are more reasons than ever for baby boomers to downsize. If you’re in this camp, there are some key things to consider before you make the jump.
- What are you paying now? What will you pay after you downsize?
- What will it cost to sell your home and buy another?
- Will you be using a real estate agent to sell your home?
- Where will you live?
- If you downsize to another home, where will you get your new mortgage?
These questions and more are discussed in Bankrate’s Retired Seniors’ Guide to Downsizing.
If you are looking to sell your home and/or downsize to another home, we would be happy to help. Please reach out to us anytime, day or night. We understand there’s a lot to think about because we’ve helped many others in your position in the DC Metro area. We look forward to hearing from you.