If you’re like many of our clients, you’ve decided your current home won’t fit your needs for long after retirement, but the great debate is holding you back: should I rent or buy my next home?
Ask yourself these four questions to end the debate and start a plan to move forward.
1. Is it time for flexibility or solid roots in your life?
For some, renting and the minimal commitment that comes with it is a perfect fit to their new lifestyle. It allows for you to test drive a new neighbourhood, housing style or a more nomadic lifestyle.
For others, home is the figurative (as well as literal) foundation to their lives and remaining homeowners is a source of stability to their day-to-day lives. Owning removes the relationship with a landlord and their role in your life, which for some is very important.
2. How long do you intend to live in the new home?
Some people decide to RightSize prior to retiring, whether it’s to take advantage of a strong housing market or to live in a more manageable space after the kids move out. An important consideration is how long you are planning to live in the home you move to, after selling the larger family home. If you are thinking you’ll retire in a year and then move out of the city for good, it might make more financial sense to rent for that year.
If you want to keep a residence in the city after retiring, even for part of the year, purchasing a smaller home or condo could be a great solution both financially and for peace of mind.
3. Freedom from your house or freedom from rules?
Freedom for renters comes in the form of not having to worry if it’s time to replace the roof or if the washing machine is acting up again. When you rent you are paying the landlord for the right to live in and enjoy the home. Part of that arrangement means the responsibility for maintenance falls to the landlord.
Freedom for owners comes in the form of having control over your space. When you rent you have to clear decorating choices with the landlord and you have little (if any) say in how a repair is carried out. Owning means you carry the cost to maintain the home, but also control over the decisions involved.
4. Do you want the equity now or later?
Selling your home and renting means you have the option to invest that freed up equity in other ways or create a plan to live off your nest egg.
If you buy another home, it’s more difficult to access that reinvested equity but as real estate is typically considered a safe long term investment, your capital is protected, and hopefully appreciating, while keeping a roof overhead.
For more information on purchasing your next home click here.
For more on renting click here.
For information on how we’d handle the sale of your current home click here.