Buy or Rent in Retirement?

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Is it better to rent or own your home in retirement? It depends on your goals and financial situation.

Weigh the pros and cons of each housing option as you head into retirement.

“There is no one correct answer,” says Doug Heddings, founder of Heddings Property Group. “Each individual retiree must evaluate their financial portfolio to determine the cash that they will need to live on a monthly basis,” he says. Most retirees grew up with the idea that owning a home is always the best choice. The U.S. Census reports that 81 percent of Americans age 65 and older are homeowners. But that attitude may be changing. Experts agree it’s unwise for retirees to carry over large debts into their retirement years. In 2009, half of retirees carried mortgage debt, a figure that doubled from 2007 when only one in four had mortgage debt. And a recent study by the Joint Center for Housing Studies of Harvard University projects more than 2 million Baby Boomers now entering retirement will opt to rent.
So how do you decide?

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A Standard Homeowners Policy

Know what is covered in your homeowners insurance policy.

A standard homeowners insurance policy includes four essential types of coverage. They include:

  1. Coverage for the structure of your home.
  2. Coverage for your personal belongings.
  3. Liability protection.
  4. Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.

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Purpose of a Real Estate Appraisal

How much is your home worth? A real estate appraisal will tell you.

 In order to obtain a home loan, you will need an appraisal on the property you wish to buy. Your lender will set up the appraisal and the results will help determine how much money the lender will be willing to lend on the property.

The purpose of a real estate appraisal is to determine the estimated market value of a house, condominium, commercial property, vacant land, etc. It is used to assist someone in making a decision. They may be considering purchasing, selling, insuring, or lending money on a house, condo, commercial property, or vacant lot. Appraisals are also used for tax purposes to estimate how much money a property owner has to pay in taxes.