When it comes to renting or buying a home at any stage of your life, each option has pros and cons to consider. However, if you are moving during your retirement years, these factors may influence your decision differently, and additional factors could impact your final choice.
As an independent living community for seniors in Pleasant Hill, Tennessee, our team at Uplands Village offers individuals the unique opportunity to rent OR own their retirement home. We are sharing the pros and cons of renting and buying to help you decide.
Renting Your Retirement Home
Pro: More Flexibility
When you rent a home, you have more flexibility when it comes to your ability to pick up and move. This is a plus for individuals who are unsure how long they will be in a specific area or if they are trying to get a feel for a new city before settling into one home long-term.
Pro: Money is More Liquid
When you rent a home, all of your money, or a large portion, is not tied up in the house. This “keeps you liquid and can increase your overall income during your retirement years (Investopedia).”
Pro: No Worries About Housing Market Fluctuations
The value of houses goes up and down, depending on the current state of the market. If you rent, you do not have to worry about losing money on your home (a.k.a. your investment) if the market dips.
Con: You Have to Pay Rent
Many retirees own their homes outright or purchase a home without taking out a mortgage. While they can use this lump sum of money from the sale of their current home to pay rent, this does add another monthly payment to their living expenses. Slowly but surely, this will put a significant dent in your savings.
Additionally, rent is likely to increase by about three percent yearly. While you do not have to pay property taxes when you rent a home, many landlords factor their own property taxes into the rent, so you are still likely paying them.
Con: No Customizations
What you see is what you get. Since you do not own the home, you cannot make any changes to the property (at least not without permission from your landlord). While this may not seem like an issue, as we get older, our living spaces may need modifications or additions to accommodate our needs and health changes. Without these renovations, your home may no longer be a safe place for you to live.
Owning Your Independent Living Home
Pro: Builds Equity
Quicken Loans defines home equity as “the difference between what you owe on your mortgage and what your home is currently worth.” For example, if you owe $150,000 on your mortgage, but your home is currently worth $200,000, you have $50,000 built-in equity.
You can use this equity for options such as taking out a loan, a line of credit, a reverse mortgage or leaving an inheritance. This is a significant benefit to consider in areas where homes appreciate quickly.
If you still have a mortgage, this payment will stay the same month to month, assuming you do not refinance. Of course, if you own your home outright, you do not have to worry about making a payment at all.
Pro: More Control
You can remodel, decorate, or make improvements to your home when you own it. You have more freedom and control to customize and modify your home. At Uplands Village, we encourage individuals to make their homes a reflection of themselves. However, there is a pre-approval process for major home modifications or improvements in our community.
Con: Market Fluctuations
We all know that the housing market fluctuates. This can be a good or bad thing, depending on what the market does. However, if you do not plan on moving any time soon or using the equity built up in your home, this should not impact you substantially.
Con: Home Maintenance Time
Traditionally, it takes a lot of time to care for and maintain a home. While homeowners at Uplands Village are responsibility for the upkeep of their homes, they benefit from living in a community setting surrounded by neighbors, friends, and peers.
With established neighborhoods of friendly neighbors, our independent living community for seniors offers an active and vibrant community life, a sense of belonging, and purposeful living in mind, body, and spirit. Whether you buy your retirement home at Uplands Village or take advantage of our rental program with month-to-month leases, each of our homes is one-of-a-kind and exclusive to you.
We invite you to visit our website today to explore our available residences and find your forever home at Uplands Village!