During your retirement years, you want to accomplish the goals that you’ve been working toward your whole life. Now is the time to focus on you, but you still have to worry about making ends meet without working. This is why many retirees struggle with how to handle their housing situation. Should you rent or buy property during your retirement? There are pros and cons to both of these scenarios, but, as always, the choice is dependent on your personal situation. Weigh the options and make an educated choice based on what’s right for you and your family.
Why you should buy a home
Owning a home during retirement sounds like a great idea. It’s a place to live, to gather the family, a place where you can feel comfortable and safe. In addition, a home is an asset that you can use for extra income during your retirement years. You can always refinance your home or get a reverse mortgage to acquire extra money during your retirement if you become low on funds. You can also use it as a rental property for extra income, especially if you own or purchase a multi-unit property. Owning a home during your retirement years can also be beneficial to your entire family and provide your children or grandchildren with a guaranteed place to live, which can save your family money.
If you have a fixed-rate mortgage on your home, you don’t have to worry about your rates going up over time. This is beneficial for retirees because it is easy to budget for the same amount every month. Renting a property during your retirement years means you risk that your monthly housing rate will go up over time.
Finally, it is typical that the property will increase in value over time. That means that if you own a home now and choose to sell it in the future because you decide to rent, it is likely that you will acquire more money from the sale than you purchased it for in the first place. If you’re looking in booming areas such as Toronto, Hamilton, or Waterloo real estate, you may want to look at how the value of homes in these areas go up over time before you make your decision.
Why you shouldn’t buy a home
There are a lot of costs when owning a home other than the typical monthly mortgage payment. You may need to make repairs or maintain the property, and these tasks may become harder in your retirement years. If the thought of mowing the lawn and shoveling snow out of the driveway sound like something you’d rather bypass during your retirement, you might want to consider renting instead of owning a home.
Owning a home can also become a tether during your retirement years, a time when you may want to travel. If you don’t want to worry about maintaining a home and would rather use your savings to see the world, renting property may be a better choice for you. Overall, it depends on what is right for you and your personal situation, regarding where you need to save money and how much you’re able to set aside for an investment such as a home.