Evaluating your housing options when downsizing for retirement

Rent or Buy in Retirement?

by Paige Estigarribia


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If you've reached retirement age, you may be considering downsizing your living space. Maybe you've considered renting or even buying something a bit smaller. But, how can you choose what's best for you? We reached out to Judy Robinson from Seniormoves.ca for some tips on choosing the best downsizing option during retirement. Here's what she had to say:

Q: When should retirees begin planning for their downsizing options during retirement?

Ms. Robinson: A small percentage of people begin the downsizing process while they are still working because their children have left home. Most of these people are looking at a better quality of life by the water, on a golf course, in a downtown condo near the theater, restaurants and shopping, or an adult "lifestyle" community. Many of these people are downsizing space but upsizing cost.

Others want to retire and have a reasonable quality of life so they downsize space and free up cash to do the things they want to do. 

Statistics (from Scotia Bank in Canada) show most people don't plan ahead and often make decisions on emotions. Twenty years ago, we had maybe one couple per year move to be near children. This month, we have four couples moving to watch their grandchildren grow up. One is buying and three are renting.

Q: Are there situations where retirees would be better off renting over buying? And vice versa?

Ms. Robinson: We say consult with a financial planner to see what you can afford. Next write down how you want to live and what activities are important to you whether it's gardening, travel, entertaining, working in a shop, or church. This helps people to know what will work for them. Our book and eight e-books encourage people to make "The Best of the Rest"(of the time they have)

Q: What are some factors that retirees should consider when they are trying to decide to either rent or buy?

Ms. Robinson:

Some positive things about renting are:

- There's no money invested.
- If you have money from the sale of a home, you can invest the capital.
- There are no taxes.
- You can lock the door and go away as long as you like.
- Single people often feel safer in a community rather than in a single home.
- You are not responsible for maintenance, repairs, yard work.
- Some units have a guest suite available for rent when you have visitors.

Some negative things about renting are:

- Often an agreement is signed for a minimum of a year with penalties if you move sooner.
- You usually need permission to sublet.
- Some rentals will not permit pets.
- Many units do not permit bar-b-ques.
- In some places, you need permission to decorate.
- If you decorate, you usually need to return it to the "original" state at your cost.
- If you have installed wall-to-wall carpet, usually it needs to be removed.
- In some places, you are limited in installing air conditioners.
- Some limit the time a grandchild can visit.
- Some have restrictions on what you can put on a balcony
- Some have restrictions on even bringing groceries in the front door
- Some people hate waiting for elevators.
- Some buildings have a poor maintenance record.
- Some buildings have a history of bugs.
- Some have poor parking for friends.
- Basically, can you live with the restrictions and inconveniences of renting?

Some negative things about owning are:

- You are responsible for all repairs and maintenance.
- By the time people retire, homes can be older and may need upgrading.
- If you need or want to move, you need to sell the house. If the market is down or interest rates are up for a potential buyer, it can be hard to sell.

Some positive things about owning are:

- You can walk out the door.
- You can decorate as you wish.
- You can have pets.
- It's familiar. (People don't like change.)
- Services are available to help you stay in your home if you can afford them.
- Some children have always lived in one house and they don't want the family home sold.

Will you leave
thousands of dollars on the table
by taking Social Security
at the wrong time? Find out.

Q: Are there resources that retirees can reference when trying to make their decision on downsizing housing?

Ms. Robinson: Our book on downsizing (Doug and Judy Robinson) is a good resource. A university in British Columbia is using our book as their text book for a course for seniors on downsizing. The course filled up quickly, so people are looking for information

Q: What do you find that many retirees forget to consider when planning to downsize during retirement?

Ms. Robinson: We find people often don't consider the lifestyle that would meet their needs and make decisions on emotions. They buy a condo downtown and miss a yard, hate the noise and elevator, and end up selling and buying a home. Some move to the country and last a very short time.

Unexpected things do happen including:

- sickness or death of one partner
- a child or grandchild needing to "move in"
- an out-of-town parent who needs care
- loss of a driver's license
- an unexpected major expense
- a major crime in the neighborhood

Reviewed July 2017


Judy Robinson co-authored The Best of the Rest and is responsible for Senior Moves SeniorMoves.ca. Senior Moves has been relocating loved ones since 1996. They provide senior moving and estate services. Visit them at SeniorMoves.ca today.

Paige Estigarribia is a writer for The Dollar Stretcher who enjoys writing about food, frugal living, and money-saving tips. Visit Paige on Google+.

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