Retirement housing choices have some retirees considering renting their home instead of buying.
Is that a good idea?
For many it is as it increases their disposable income to enjoy life now.
MSN Money notes that for some retirees, "renting has emerged as a viable option because it allows retirees to have more money to fund other retirement expenses."
Robert Johnson, president of the American College of Financial Services said, “For many retirees, renting is a preferred alternative, and selling a home frees up equity that can be used.”
Some of the other advantages for the renter is that the owner is responsible for property taxes, insurance, maintenance and usually any HOA fees.
Since 2000, the number of people age 55 who have chosen to rent has risen by 6%.
If you rent, you don't feel stuck or trapped. They are looking at this to make a change in lifestyle and one that has less maintenance involved.
Renting is more affordable, because consumers do not have to shell out money toward property taxes, insurance, maintenance and HOA fees.
Some retirees also chose not to renovate their home and found the supply of new construction shrinking or exceeded their price range.
Some people were forced to rent, because they could not find anything new where they wanted to live and decided they would rent in the meantime.
In many major metro areas, renting remains cheaper than buying a home. While the price of renting has risen 4% each year during the past six years, exceeding inflation, the prices are predicted to “moderate going forward” as more new construction occurs and the increase in supply will bring down price appreciation and the number of people renting.