Kiplinger: Retirees, Should You Rent or Buy Your Home?
In a recent article from Kiplinger’s Personal Finance, Jane Bennett Clark reviews the pros and cons of renting vs. buying for retirees looking to downsize their living space. While the article specifically addresses retirees, the decision between renting vs. buying is becoming more prevalent for all age groups. Throughout the article, Clark describes the advantages of renting and the advantages of buying as it relates to her personal decision to downsize her home and also asks Dave for his thoughts on the decision:
- Advantages of Renting
- Flexibility: “If you decide you hate your new digs, you can move again without a hassle”, says Clark.
- More Stable Housing Expenses: Generally, rental prices stay competitive with the local real estate market while homeowners associations fees can rise based on maintenance and upgrade costs.
- More Fluid Equity: Clark asked Dave for his thoughts on this matter. Dave says, “Short of selling your condo, the only way to access the equity is by paying a lender for the privilege. But if you rent and invest your money you can use the earnings to defray the rent.”
- Advantages of Buying
- Ownership: You can fully customize your space when you buy it; whether that means knocking down walls or installing hard wood floors, you have the ability to make the place your own.
- Price Appreciation: You enjoy any price appreciate the property gains during your time as an owner.
- Tax Deductions: “If most of your income is derived from tax-deferred accounts, the tax deduction will come in handy, even if your income is smaller than it used to be”, says Clark.
After considering the advantages of each option, Clark offers additional circumstances related to her personal finances that help her to make her decision. As always, Yeske Buie is available to discuss any questions or opportunities you may have about a decision such as this; please do not hesitate to contact us!
Read Jane Bennett Clark’s full article here: Retirees, Should You Rent or Buy Your Home.