The Gardens at Twin Hickory

4700 The Gardens Drive, Glen Allen, VA 23059
Call: 888-621-8872 (804) 364-3649 Email UsTheGardens.CommunityWebsite.HHHunt@aptleasing.info View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

The Gardens at Twin Hickory Blog

Buy or Rent in Retirement – Glen Allen, VA

Joseph Coupal - Monday, July 25, 2016

Where do you want to live during your retirement years? And do you plan to buy a home or rent one? Those are key questions, with many factors to consider and large amounts of money at stake.

For example, if you buy a home in retirement, it’s an expensive commitment. You have to pay a large deposit up front and you’ll be obligated to make equal monthly mortgage payments for up to 30 years.

Pros and cons exist for both options; to help you decide whether to buy a home or rent your residence during retirement, consider the following factors.

Buying a Home in Retirement

No matter what your stage of life, purchasing a house or condo is a major financial commitment. You have many choices when retiring, but if you later decide you goofed on your home plan, it is difficult to change course. Here are some pros and cons to buying a home after you retire.

Pros of Buying a Home in Retirement

Buying and owning your home in retirement offers some critical advantages. Consider these important factors that will help you decide whether this is the right decision for your retirement living:

  • You own your castle. You can make the improvements or changes you desire. No landlord needs to approve changes, although there might be condominium rules or neighborhood restrictions.
  • Mortgage payments remain stable. You know exactly how much your monthly mortgage payment will be for the entire term of the loan. It cannot rise, unless you have an adjustable-rate loan. However, taxes may increase.
  • You can pass the property on. Your family or other heirs can inherit the property.
  • You are not tied to your home forever. You have the option to sell it and buy a different residence, or to switch to renting. Be sure you want to stay in your home for at least 5 years.
  • Tax advantages might accrue. A mortgage can provide tax benefits. Consult an accountant or other tax advisor to determine if those factors are significant.

Cons of Buying a Home in Retirement

You should also consider the disadvantages that exist to owning a home during retirement. Here are a few disadvantages that could turn you off of home ownership:

  • Your residence will need ongoing maintenance and repairs. Things break down, no matter how diligent you are about keeping major systems and appliances in good working order. For example, you might have to fix or replace the roof, windows, water heating system, and appliances like the washing machine and dryer. You will need adequate retirement savings to pay for necessary maintenance and repairs.
  • You are required to pay extra costs. These costs include taxes, insurance and possibly homeowners association fees. It is unlikely these costs will decrease during the term of your mortgage.
  • If you want to move, selling your home might be difficult. You do not have control over the local housing market.

Renting in Retirement

It is no longer assumed that all retirees have to own the home they live in during retirement. They can rent a home instead. Renting can be a viable and desirable option for many people. However, as with buying a home, there are pros and cons to renting that you need to consider carefully.

Pros of Renting a Home in Retirement

Renting a home offers unique advantages that might appeal to you more than the advantages of owning a home. Here are some of the positive points of a rental option:

  • You generally do not have to make a long-term commitment. As a renter, your lease might be annual, with the option to renew each year — or it might even be month-to-month.
  • You have considerable flexibility. You can move elsewhere for any reason — for example, if the cost of living in your area becomes too high or you want to live closer to family.
  • You have no expensive maintenance or repair costs. In most cases this is true. It is a relief to be able to call someone else to fix the overflowing toilet.
  • You do not have to pay property taxes. Such taxes can cost thousands of dollars per year.

Cons of Renting a Home in Retirement

Although there are a number of positive features to rental homes, consider some of the disadvantages to this option so you can better decide if it’s right for your retirement situation.

  • You have less control over housing costs. The main disadvantage of renting is that after the term of your lease, you have no control over housing costs..
  • Your ability to personalize is limited. Most standard form leases give you limited opportunities to make changes to your home. It is likely your landlord will not permit major structural changes.
  • You have little say about changes. If the owner wants to make certain changes to the property — for example, to paint the house an ugly color — you have to accept them.
  • You need to pay on time if you want to move again. If you want to move to a different home, you might be dependent on your landlord to give a good reference. If you have habitually paid your rent late or had disputes, the landlord might be reluctant to support you, which could affect your ability to rent elsewhere.

Ask These 6 Questions First

Understanding the pros and cons of buying versus renting in retirement will help guide your decision. But before you decide, there are threshold questions you need to ask yourself first.

  1. When do you expect to retire?
  2. Do you already own a home you can sell to buy a new property? If not, make sure you have the resources for a down payment, closing costs and up-front expenses.
  3. How long do you think you will stay in the new home?
  4. What are your sources of income for paying housing costs? It’s also important to gauge how consistent that income will be.
  5. How much money do you have available for total housing costs? If you buy a home, do not forget to include taxes, insurance and a reserve for maintenance, upgrades and repairs. If you rent a home, you will likely be required to pay a security deposit and the last month’s rent up front, plus renters insurance.
  6. What is the trend for cost-of-living in the area? If you own a home, rising home values might be advantageous if you plan to sell later. If you are a renter, your landlord might raise the rent if the neighborhood becomes more desirable.

Bottom Line

Making the decision of renting versus buying is complex at any stage in life. You need to weigh the pros and cons of each possibility for properties in your area. Ultimately, your decision depends on your assets, risk tolerance and personal preferences for your retirement living.

For more information on apartments in  Glen Allen, VA contact The Gardens.

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The Gardens at Twin Hickory

4700 The Gardens Drive, Glen Allen, VA 23059

Call: 888-621-8872
Email UsTheGardens.CommunityWebsite.HHHunt@aptleasing.info
View Map

Opens: Monday-Friday: 9A-6P | Saturday: 10A-5P | Sunday: 1P-5P

$1,049-$1,481