The housing market collapse of a few years ago and the run-up in prices since then — as household income has remained stagnant — has fueled the current “renting vs. buying” debate.
Add retirement to the discussion, and the issue takes a whole other turn especially when we look at pensioner property values over past few years. It’s not just people who are going into retirement that have to think about renting or buying a home. This can be a topic that adults in general need to think about, including Millennials. You should do your research into something like Rent a House from Moveflat if you are in need of a place to live in London. If you are looking to rent within the United States you might be interested in a these homes for rent in ellicott city md as they might be able to help you find a property for retirement. Is renting a better bargain in your retirement years, especially if the bulk of your investment strategy has been concentrated in paying off your house?
Neal Frankle, of Weath Pilgrim, illustrates the implications of owning vs. renting in retirement.
“Let’s look at a simplified illustration to make the point. Assume Patty Rich is 65 and retired. Her only asset is her home, which is free and clear — she has no mortgage. And her only income comes from Social Security and pension,” writes Frankle. See the chart below:
Although Patty doesn’t have a mortgage, it costs her $1,200 a month to hold on to her property. Says Frankle: “Many people are very surprised to see what the real costs of owning property actually are.”
Now see the following chart for Ann, who is renting and focused on a retirement fund, as opposed to real estate.
Writes Frankle: “You can see that Ann’s rent is higher than what it costs Patty to maintain her home. So what? Ann’s net income is almost 50% greater (jumping from $1,800 to more than $2,600 a month) because she has investment income and that more than makes up for the higher rent she pays.”