Some retirees want to continue to live in their own home as long as possible, but others are attracted to the convenience and flexibility of renting. The number of renters in their early 60s increased by 84 percent between 2006 and 2016, the most of any age group, according to a new Joint Center for Housing Studies of Harvard University analysis of Census Bureau data. While some of this change reflects the aging of existing renters, one in eight homeowners ages 65 to 74 made an own-to-rent transition over the decade. Here’s why retirees are increasingly interested in becoming renters.
Less home maintenance. Maintaining a home is a lot of work, and it becomes more taxing as you age. Even something as simple as changing a light bulb over the stairs can be difficult or even dangerous for an older person. When you rent, you can call someone else to fix the drains and take care of the yard. “They want less of the responsibilities of owning a home,” says Jennifer Molinsky, the lead researcher on older adult housing issues at the Joint Center for Housing Studies of Harvard University. “You don’t have to mow the lawn anymore and shovel the snow.”
Age-friendly features. As you age, you might not be able to navigate stairs or carry your laundry down to facilities in the basement. Moving to a place with more age-friendly features can allow you to remain independent longer. “People who are making that transition often end up in more accessible places than those that they left,” Molinsky says. “Some of the newer buildings are elevator accessible, the unit is all on one floor, there might be lever style handles on the doors instead of knobs and you can get into the building with a ramp and without steps.”
Proximity to services. Many people moved to the suburbs in order to buy a home, but that might mean you need to drive to get to the grocery store, bank or pharmacy. Apartments tend to be clustered in more urban areas where you can walk or take very short drives to the services you need. “When households want to downsize, walk away from the responsibilities of homeownership and access to more recreational and volunteer opportunities, rental may be the only option in their market,” says Marilyn Bruin, a housing studies professor at the University of Minnesota. “I do not hear many homeowners wanting to leave the equity or independence associated with ownership, but I do hear about a desire for more social interaction and less burden associated with living in a single-family house.”
Checking out a new location. If you are planning to move to a new place in retirement, it’s a good idea to rent first to check out potential neighborhoods and make sure the area will be a good fit. “Many are choosing to rent for one to three years in order to learn the area and neighborhoods before settling on a purchase, especially in cities,” says Andrew Carle , founding director of the senior housing administration program at George Mason University.
Lower costs. The financial crisis of 2008 had a big impact on many older homeowners, in some cases even pushing people out of their homes and into the rental market. “The foreclosure crisis and the recession did affect a lot of people who were in their pre-retirement years,” Molinsky says. “Some people are forced to do it and are being pushed out of homeownership..”
Cashing out. If you live in an expensive part of the country, selling your current home and relocating to an area that costs significantly less can give a quick and significant boost to your retirement savings. “Some are just seeking to take advantage of the equity and increased value they’ve accrued in their home, to cash out and either help fund and/or enjoy their retirement,” Carle says. If you decide to rent in the new location, you can invest the proceeds of the sale to create a new source of retirement income. You could also rent out your former home and use the proceeds to pay for retirement in another location, but this might involve some work.
Living alone. Older adults are increasingly likely to live alone, especially after one spouse passes away. Some retirees don’t want to maintain a several-bedroom house when they live alone. Apartments provide neighbors who live in closer proximity, which can be useful in the event that you need help. Apartment buildings with shared amenities might provide greater opportunities to socialize around the pool or common areas. Some apartments also have a door person or regular maintenance workers who might be able to provide assistance with basic tasks. “Some retirees just don’t want or may not have the physical energy to handle ongoing home maintenance,” Carle says. “Others are looking to travel, sometimes for extensive periods of time, and want to know their property will be maintained and secured while away.”
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