The Baby Boomer generation is now either in retirement or fast approaching their golden years, with about 10,000 Baby Boomers turning 65 every day at a rate that all Boomers will have passed that age by 2030.
Given that statistic, more and more Boomers are ready for a lifestyle change, looking to sell their larger, longtime homes and downsize into a smaller abode. But should they own or rent in this next chapter of their lives? That’s a question that may be better answered after considering these few pros and cons of each option that can apply to your current situation and future plans.
Rent Continues to Increase Over Time
According to the United States Census Bureau, the median asking rent price has been climbing at a steady pace since 1988, from an average of $350 per month rent to $1,450 per month as of the second quarter of 2023. This means that if you choose to rent, there is a greater risk that your rental payments will increase each time you renew your lease.
Most Homes Come with a Fixed-Rate Mortgage
One significant advantage of buying a home is the financial stability it can provide. Most homes come with a fixed-rate mortgage, which means your monthly housing payment is locked in and steady – and predictable for the long term of the loan. This can provide a sense of security.
More Up-Front Costs When Buying a Home
While you are saving money in the long run when buying a home (and building equity along the way), there are more up-front costs buyers need to be prepared for, including down payments, taxes, and closing fees. While these expenses may seem daunting initially, they are often offset by the long-term financial gains of homeownership.
Financial Benefits of Owning a Home
AARP reports that buying a home is a better long-term strategy than renting because of the significant financial benefits. These benefits include building equity to provide generational wealth paying for your next home with the equity you’ve already built. Hence, you have no mortgage and are using available equity to make the renovations you want and need.
Rentals Come with Less Responsibility
One of the biggest pros of renting is that there is less maintenance responsibility, adding freedom and making everyday life easier. Lawncare, and any plumbing or electrical issues are taken care of by property management, often 24/7, and not your financial responsibility. Added perks to renting are condo complexes that feature a long list of onsite amenities that may be a nice treat later in life.
Consider Your Future
When contemplating whether to buy or rent your next home in your retirement years, it’s essential to consider your financial situation and lifestyle preferences. Call me to discuss your options and make an informed decision that aligns with your goals for this exciting chapter of your life. Owning a home can offer financial stability and wealth-building opportunities, while renting can provide convenience and peace of mind. I’m here to help you make the right choice as you embark on this new adventure.
If you’re a Baby Boomer who is considering selling your current home and is unsure whether to buy or rent your next home, feel free to contact me anytime. I’ll be more than happy to help you make an informed decision that aligns with your goals and financial situation.
Paige Bird is an experienced real estate ally in Myrtle Beach. She has been named the #1 RE/MAX Agent in South Carolina for nine consecutive years. In 2022, Paige closed 75 properties, with a total sales volume of $26,472,347 and an average list-to-sales price ratio of 99.10%.
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