As we get older it’s only natural for us to think about the future and how we can make our lives that little bit easier and stress free.
Those of us who are approaching retirement age have to make tough decisions in regards to how we live our lives the older we get. Should I keep my current family home? Should I sell my house and downsize to a smaller one? Should I completely get rid of the house and just live on rent so I don’t have to worry about house maintenance and the like?
These are all questions people who are approaching retirement age need to ask themselves and then make a decision based on their circumstances. Before we begin looking at the pro’s and con’s, you need to decide on a few key things which will help you determine whether renting or being a home owner is the best option for you. Ask yourself:
1) Are you looking to live an easy life with little maintenance costs? Or
2) Are you looking to make an investment and hoping to have more assets in the future?
Lets begin by looking at some advantages of owning a home.
This one is probably the most obvious one but most people who are approaching retirement already have homes and have also paid off the mortgage for their home so they will be making huge savings by not having to pay rent.
When you have your own home you can do pretty much anything you want to it, for example, if you wanted to change the interior or repaint the walls in a different color you can do it anytime you want.
If you were renting you would likely have to get permission from the landlord as well as having to deal with the landord themselves – some of who can be very difficult people do deal with.
If an emergency were to come up and you needed money quickly you will always have your home available which you could remortgage or sell to generate extra income. If you are renting this is none existent. Your rent money is effectively dead money once you hand it over.
Research carried out by accountants PricewaterhouseCoopers states that by 2025 there may be slightly more people renting privately in the UK than owning with a mortgage so is renting the way forwards?
Lets take a look at some of it’s advantages
Although you will have to start paying rent every month, you will not have to worry about the extra running costs or fees and hassle associated with buying and selling if you do need to move again. This is because in general rented accommodation is much smaller than the typical family home so they cost much less to maintain.
You won’t have to worry about being tied down to one place and can move around at will with very little hassle. This is also great for those retirees who want to move closer to their children who live in different cities.
Although you won’t be gaining any equity while renting, you won’t lose any either. If you own a home there is a chance that rates can change or prices of homes can drop leaving you with less money overall.
In the end it really comes down to what kind of lifestyle you want to have for the rest of your life. Renting brings flexibility but owning leaves you a little more secure and can provide a little something for your children when you do eventually pass on.