If you assume it’s better to own your home once you retire, you may want to consider the alternative. Renting an apartment in Charleston, SC can be a better choice, depending on your circumstances and goals.
Just over 80 percent of American householders age 65 and older own their homes. Many retirees want to stay close to friends and family and prefer the stability of home ownership. Others hope to see home values rise before selling, or plan to take out a reverse mortgage.
Renting offers its own benefits:
• Flexibility. Many retirees plan to relocate at some point, perhaps to be closer to family members in other cities, or just to enjoy a different part of the country, perhaps with more sunshine and golf courses. If you’re not ready to move yet, you may simplify matters by selling your home now and moving into an apartment locally. When you are ready to make the big move it will be much simpler, as you have already sold your house. On the other end, when you do move you may want to rent an apartment in the new city to make sure you are happy living there before making it permanent.
• Simplicity. Owning a home comes with lots of responsibilities, from mowing the lawn and shoveling snow from the sidewalk to painting the exterior and replacing the roof. Some folks want to keep doing those things as long as they are physically able, but if you’re tired of the time and expense, renting frees you from all of these tasks.
• Liquidity. From a financial standpoint, renting vs. owning can be a complex question involving taxes and other long-term issues, so it’s a good idea to discuss it with a financial adviser. In general, renting can be a good alternative to having much of your retirement savings tied up in a house. At the same time, you eliminate all the costs of home ownership such as maintenance and property taxes. A bonus advantage is that you will no longer be carrying that large mortgage debt.
If you are considering downsizing, it may pay to look into renting vs. owning, especially if you’re not sure how long you will stay in a new location. You don’t want to pay closing costs to buy a new home and then move again in two to three years. At any rate, these issues should be resolved within the context of your overall financial plan.
Excerpts – New Haven Register