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The Pros and Cons of Renting a Home After Retirement

The Pros and Cons of Renting a Home After Retirement

One big part of retirement planning involves figuring out where you’ll live and what it will cost on a monthly and yearly basis. Many retirees stay put in their home—particularly if it’s paid off or close to it, avoiding one major cost-of-living expense in the post-work years.

But then, many others choose to move. Common reasons include to downsize, to find a place more suited to the lifestyle they want in retirement, to relocate for any number of reasons (e.g., proximity to family, more desirable weather, a large senior population), and so on.

If you’re involved in retirement planning and intend to move once you stop working, you have a lot of decisions to make. One of the choices you’re faced with is whether to buy a new home or rent. There are a number of pros and cons of renting a home after retirement, so weigh which ones matter most to you, and of course your personal preferences affect what’s right for you.

So, here’s a quick look at some of the most significant pros and cons of renting a home after retirement. But one caveat: These assume that you sell your home; the lists would look different if you kept your home and used it as a rental property and moved into your own rental, which could be a sensible option in certain circumstances.

Pros of Renting a Home in Retirement

  • Eliminate the debt of a mortgage
  • Avoid the stress and expenses of home and yard maintenance and repairs—especially the serious (and seriously costly) unforeseen headaches when something big breaks or needs replacement
  • Travel more freely without being as tied to home maintenance
  • You can gain access to amenities like a pool, fitness room, etc. without associated costs (either from adding/maintaining them at home or paying membership fees)
  • Renter’s insurance costs much less than homeowner’s insurance and property taxes
  • There’s far less pressure and a simpler process when picking out a rental than when choosing a home to buy
  • Depending on your location, you may have many more home options by renting
  • It’s much easier to move, should you decide to for any reason
  • Renting is a good way to sample life in a new location without the major commitment of purchasing a home

Cons of Renting a Home in Retirement

  • There’s sometimes an element of insecurity, like in a situation where the homeowner could decided to sell or stop renting out the home
  • Monthly rent payments are often higher than mortgage payments (though again, this can often balance out or still be cheaper when you factor in insurance and taxes)
  • You lose some tax advantages, like deductions for mortgage interest and property taxes
  • You give up a significant asset and access to your home’s equity
  • There’s less predictability in your annual housing cost
  • You’re at the mercy of a landlord when you need maintenance, how much your rent increases when your lease is up, etc.
  • There’s usually more noise and less privacy if you’re in an apartment, condo, townhouse, etc.
  • You have less control over customizing your home to make it exactly as you want it
  • You no longer have the status of “homeowner,” if that’s important to you

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We're a well-established tax and accounting, mortgage, and financial advisory firm operating since 2000. We serve our clients from three Central Florida locations. Our expertise extends to both domestic and international concerns when it comes to investing and doing business in Florida and beyond.

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