Rent or Buy in Retirement
Advantages
- Mortgage interest write off
- Property tax write off
- Asset appreciation
- Freedom to make changes as desired
- Renting can mean a short term commitment to test a location
- Renting might be cheaper – run the numbers
- Moving into a brand new apartment with new amenities
Disadvantages
- Repairs and maintenance of a home
- Gaining access to equity can be difficult or slow
- Selling a home can take a long time
- Coming up with a down payment to buy a home
- paying the mortgage each month
- Landlord can change his mind and force you out
- The apartment is unlikely to be upgraded over time
- Leaving the family home can be difficult
Each person needs to evaluate each of these issues carefully. Then make the best decision for their personal situation. They also need to run the numbers for both scenarios to assess which one meets their financial needs. Build-in inflation for things like rent increases, utilities, etc to ensure that you do not get a big surprise.