Whether you’re about to head into your senior years or are looking for ways to improve how you’re living out your golden years, you might be re-evaluating your housing options.
Many seniors are faced with the decision of remaining in their established familial home, downsizing, or leaving homeownership behind altogether. While it’s a hard decision to make, shifting from homeownership to renting could actually improve your quality of life in several ways.
If you are hesitant to make the transition, you might be worried that it’s a decision you’re going to regret. After all, leaving behind a home with decades of family memories is never easy. However, the advantages are hard to ignore. We’ll dive a little deeper into the pros of renting as a senior, so you can see if it’s the right decision for you.
#1: More Money to Spend
One of the biggest concerns for seniors is income—even if you have a substantial retirement account. Since your mortgage is likely your biggest expense, it makes sense to consider renting as an alternative.
Based on the Rentable July Rent Report, the median rent for a one bedroom in January 2020 was $1,086 and the median two-bedroom apartment was priced at $1,346. Depending on where you’re living you might be able to save significantly just on monthly rent alone—check out the numbers based on recent mortgage data.
According to the most recent American Housing Survey from the U.S. Census Bureau, the median monthly mortgage payment in the U.S. is $1,100 and the average mortgage payment is approximately $1,500. Of course, this can be a far cry from what you pay depending on the state or even city you live in. For example, in Pacific states (CA, OR, WA, AK, and HI), the average monthly mortgage payment was $2,096 (based on U.S. Census Bureau data).
Let’s take a closer look at some of the various expenses you can eliminate or reduce by renting:
Anyone who’s owned a home knows that property taxes are a major expense that you have to prepare for by saving throughout the year. According to Business Insider, the average property tax bill in the U.S. is approximately $2,279.
Your Savings: If you don’t own property, you don’t have to pay those taxes, simple as that. If you’re paying $2,279 (or more) in property taxes, that’s almost two months’ worth of rent in many places in the country.
Maintenance or Repairs
One of the biggest costs of homeownership is unexpected repairs (plumbing, water heater replacement, etc.) and regular house maintenance (roofing, landscaping, etc.). According to The Balance, homeowners spend an average of $1,105 on annual home maintenance. Additionally, another 30% of homeowners will have to pay for emergency repairs, which run an average of $1,206.
Your Savings: Since you’re no longer responsible for these expenses, that’s an automatic savings of about $1,000 to $2,000 each year.
Typically when renting, the homeowner is responsible for the HOA fees, not you. If you own a home in a community with a homeowners’ association, you know this is no minor savings. According to Investopedia, the average HOA fee is about $200 a month—however, they can range from $100 up to $700 a month in various communities across the country.
Your Savings: Potentially $200 or more per month. While some homeowners may choose to offset that cost with slightly higher rent, you likely won’t notice it if it’s priced similarly to other homes within the area, plus you get to take advantage of the amenities.
With all these savings, you can finally take that trip you’ve been dreaming of, visit your family more, or invest in a new pastime like learning how to fly, sailing, or fixing up a vintage car. However, if you’re simply not ready to part with your family home, but want to have more disposable income, a reverse mortgage might be another option to consider.
#2: Less Space to Clean or Upkeep
Let’s face it, cleaning and maintaining the needs of a large household when it’s just you pulling all the weight is hard work. And as you age, keeping up that work can become more and more difficult and time-consuming.
By downsizing to a one- or two-bedroom rental (or even renting a room in a house), you can save a lot of time in your month, week, or days, because your work is significantly reduced. That alleviates a lot of stress and burden on your body. And that time and worry saved can be put toward more enjoyable and productive things, like learning a new hobby or spending time visiting your grandkids.
#3: More Freedom
Without a home to pay for and manage, you have more freedom and time to spend doing the things you enjoy. Here are a few examples of the new freedoms you can enjoy if you rent instead of own:
- Without a home keeping you locked into a locale, you have the ability to move cities and experience a new way of life—it’s never too late to start a new adventure.
- If your living space isn’t suiting you, you can move. This means that if you’re living somewhere now that won’t be the right fit for you as you get older and need more assistance, you can simply move when your lease ends, you don’t have to worry about going through the whole process of selling.
- Find new ways to invest. If a home isn’t the best fit for you anymore, that doesn’t mean you can’t still have assets. Instead of simply having your home (which might be partially “owned” by your lender, you can have other investments that you can trade and sell at your discretion when you need the income).
Things to Consider Before Renting
If you’re sold on the notion of becoming a renter, there are a few things you should keep in mind that will help you find the right fit.
- Safety of the area (if you’re living alone as a senior, you want to find a neighborhood that’s considered safe).
- Vicinity to necessities and entertainment (being in close proximity to these places is not only convenient but will make things easier as you age).
- Accessibility and layout (stairs, large floor plans, and other layout challenges can make things harder on your body and increase your risk of injury).
With these tips in mind, you can start to look for the perfect place to rent.
Take the Next Steps to Become a Renter
Try to think of renting as a new and exciting opportunity, and it can be just that. Looking for a new place to live can be daunting, especially if you haven’t moved in a long time, but don’t worry, there are plenty of resources at your disposal—and don’t be afraid to ask for help from family members.