10 Reasons You Should Rent a Home in Retirement
Did you know that the average retiree spends around $17,500 on housing expenses like taxes, repairs, and maintenance per year? For this reason and more, pre-retirees look to downsizing to a smaller rental or single-family home. While we often speak about the benefits of homeownership, today we’ll discuss why mature adults can also benefit from renting a home in retirement.
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What are the benefits of renting a home in retirement?
Renting a home in retirement can be beneficial to mature adults who need to make changes that suit their new stage of life. As empty nesters, many of these residents yearn for a simpler lifestyle where they don’t have to worry about minutiae like mowing their lawns, home repairs, increasing property taxes, or even driving. Renting a home in a retirement community eliminates a lot of that fuss and streamlines life for mature adults who want to just enjoy life.
While there are benefits to also downsizing to a smaller house, renting after retirement comes with its unique set of benefits. The choice is ultimately yours. If you ever want to chat about your real estate choices, contact us anytime. Our adult living department can guide you toward the right choice for you.
10 Reasons Why You Should Rent in Retirement
Whether you sell your home or rent it out and downsize to a smaller rental, here are 10 advantages of renting a home in retirement.
1. No more home maintenance costs or repairs!
Besides changing an air filter, you don’t have to lift a finger for a rental home’s upkeep. As homes age, their repair needs only increase. If you can’t keep up with them, then you’ll need to pay people to do it for you. Tasks like HVAC maintenance, gutter repair, plumbing, electric, broken appliances, lawn care, and roof replacements all add up!
- Note: If you choose to rent your home for cash flow instead, then your property manager will take care of all repairs using an escrow fund from your rental earnings. Also, you won’t be living there to worry about it! As market rent increases, so will your savings — especially if your home is paid off! If you do have mortgage payments, market rent tends to be higher than existing mortgage payments.
2. You can have a more flexible lifestyle.
Want to live by the lake for a year and then see what it’s like to live in the city? Well, renting after retirement can help you sample different areas. You can also choose to live near more amenities or move directly into an active adult community where you get so many conveniences minutes away.
- Note: Speak with a financial planner to see if this is possible with your fixed income retirement plan. They can walk you through all your options, such as reverse mortgages and more.
3. You can cash out on home equity.
Selling your home unlocks your home equity, which can fund your retirement savings and make your golden years a lot more comfortable. Meet with a financial advisor to see how your equity can work for you when you figure in other income streams like pensions and social security benefits.
4. No more paying property taxes or homeowners’ insurance!
Property taxes tend to increase as home values rise and inflation grabs hold of the economy. Homeowners insurance also goes up as property values increase. Not having a home eliminates this yearly expense. If you sell your vehicles too in lieu of a retirement community’s transportation, you save even more.
- Note: If you choose to rent your existing home instead of selling it, then you can figure in the cost of property taxes into market rent prices, avoiding this expense as well.
5. Longtime owned homes get tax breaks.
Did you know if you sell a home after owning it for 2 years, you can avoid paying capital gains taxes? For singles, you get the first $250,000 untaxed and can get up to $500,000 if married while filing jointly.
6. Resolve accessibility issues without paying extra.
Rentals that are single level with accessibility upgrades like walk-in tubs and entry ramps and wider doors are major conveniences for mature adults who need accessibility ASAP. Instead of making expensive upgrades to an existing home, renting a fully accessible active adult home can be a major time and money saver.
- Note: Adult living communities grant you easy access to quality healthcare, which gives these homes an advantage over standard rental properties.
7. Downsizing lowers utility payments.
Downsizing to a rental that fits your needs, instead of a large household, can help you cash in on savings with the electric, gas, water, and sewer bills.
8. Renting your first home gives cash flow.
While selling is an excellent way to get an immediate lump sum, you can also rent your home for market value. This provides a monthly cash flow that grows with inflation and cost of living increases. It’s a good option for folks with more money in the bank but just need a boost to afford adult living community rental costs. You also keep your home as an asset, from which you can unlock equity if needed.
9. Budgeting is easier after downsizing to a rental.
Lower monthly housing costs, reduced or no maintenance concerns, and no property tax or homeowner’s insurance coming out of pocket means your budget just gets simpler after downsizing. Whether you sell your home or rent it for monthly income, you stretch your retirement income with the extra cash on hand.
10. You can make more friends and stay active.
Living in a big house with accessibility issues while having challenges driving and doing daily tasks can feel isolating really quick. But you can beat loneliness by joining an active adult living community with plenty of social events – plus a ton of people who are in the same stage of life as you. Transportation is often included, and so are meals. All this time you gain can now go toward making new friendships and enjoying your golden years to the fullest.
Reasons Why You Should become a Renter in Retirement
Retirement planning involves a lot of considerations. Renting your home after selling or renting your original home can give you plenty of benefits during your retirement years. Whether you’re looking for less hassle, financial savings, or to make new friends in an adult living community, Marketplace Homes Adult Living can help you find a solution for your future.
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