Should I Rent or Buy a Retirement Home?
There many things to consider when considering where you’re going to spend time during the winter. Should I rent or buy a retirement home?
1) Where are you going? (Dave Matthews Song lol!) and for how long.
2) Should I rent? positives and negatives of each
3) Should I buy? positives and negatives of each
4) Downsizing your current home for a smaller to pay for a winter home.
5) Cottage, if you have one, What do I do with it?
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1) The first question you have to ask yourself is where do you want to go and for how long?
The decision of should I rent or buy a retirement home depends on so many factors. Do you want to travel the world? do you want to spend time somewhere tropical? Do you want to spend time in Arizona or Florida?
The next part of that question is how long do you plan on being away? If you’re only going away for a few weeks at renting is your obvious choice. There are many resources outside of hotels that can provide excellent opportunities to get familiar with any particular local. VRBO and Airbnb are wonderful ways to try something different and most times very affordable.
Watch out for Parking Fees!
I will say once you get into the city centers it will be more expensive, but in a lot of instances say New York (not that you would go in the winter) but if you look just outside the city near the subway you can find amazing deals. Considering it could cost upwards of $50 a day to park when you could park in Brooklyn or New Jersey for free that’s a lot of money saved.
I for a long time wanted to buy buy buy, and I’ve changed my tune a little as I realized on our last trip to the Dominican Republic. There are advantages (I.E you could rent out your place when you’re not there) I want to visit so many places around the world so maybe buying is not the best choice unless I find somewhere I fall in love with.
Extra Costs
Do your homework before you do anything and consider what can you afford? how far away you want to be from home, insurance costs – the older you get the more expensive it will be to cover potential healthcare fees. All of these questions will determine where and for how long you can go away which will in turn dictate should you buy or should you rent.
2) Renting pros
- flexibility go anywhere assuming the availability
- provides options in terms of Location and amenities
- you don’t have to worry about maintenance
- no extra fees I.E. condo fees, maintenance fees and insurance
- Many options to search VBRO and Airbnb etc. The upside here is you can rent based on previous renters reviews.
Renting Cons
- it’s not yours so you have to ensure its taken care of
- Depending on where you want to go there could be limitations due to peak seasons
- Rents can increase over the years
- Landlords prefer longer rent periods (cost certainty) so shorter term rentals may be hard to come by
- Units may not be as well maintained as your “own place”
- Cable and Wifi may be limited
- if you have a dog or a cat you may not be able to bring them or you’ll be limited to only rental units that will allow them.
3) Buying Pros
- it’s an investment. You can rent it out when you’re not there, it will (should) appreciate in value over time.
- you can make it your own, chose the decor appliances and use your own sheets.
- no concern about availability, its ready for you anytime.
- no worries about pets or number of visitors
Buying Cons
- you will need to maintain it, may pay condo fees, repair costs,
- When your not there you will need to maintain it cut the grass clean the pool etc.
- Insurances costs, tax implications depending on the country
- If you pass away, decide to give it to your kids or sell it there could be big tax implications in the country you own it in and in your own country.
4) Current Home
Depending on your situation your current home may be too big for two people or one person for that matter. If you have kids you need to imagine them out of the house god willing! Lol. Seriously, kids are staying home longer these days they will move out at some point.
Is or will your house be paid off by the time you retire, I ask this because if the house is paid for you may want to just keep it as your main base sort of speak. The housing market where I am is going gangbusters right now and it may not be worth your while to move if it’s going to cost you more to move. If you decide to simplify and move out of town to the country you may find savings, but you are also moving farther from services, restaurants, entertainment, and healthcare so you’ll have to “Choose Wisely” as that old knight guy in Indiana Jones and the Last Crusade said.
My wife and I hope to have the house paid for at retirement and plan to stay here as long as possible, we love our house. Having said that living on the east coast where I’m from is always an option. You can’t beat the lifestyle and cool Atlantic air.
5) Cottage?
If you’re lucky enough to have a cottage or trailer is it a place you would want make as your primary residence? If it is or if its worth doing a few upgrades to make it your permanent home perhaps consider selling your current home and living at the cottage during the summer and live or rent at your place in the winter. It’s not an option for everyone as some cottages are pretty remote.
There is no way that my wife would live in the woods for 6 months so its not an option for us. Its too far away from shopping malls and civilization. Hey, the trade-off is somewhere beautiful in the winter right.
It’s a lot to consider so the sooner you start considering these scenarios the better.
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