Retirement Reboot: Upsides of Downsizing to a Rental Home


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In retirement, you don’t necessarily need a house with several bedrooms and a big yard. In fact, stairs to climb and a yard that needs mowing can become a significant liability as you age. Renters get to outsource emergency repairs and some home maintenance chores, which can make life easier as a retiree. Downsizing to a smaller apartment can also improve your retirement finances. Here are 10 reasons to become a renter in retirement.

Tap your home equity. When you sell your home and become a renter, you can add that home equity to your nest egg, which could significantly improve your retirement finances. “Selling the home and renting gives you capital that is able to produce and earn income,” says Neal Van Zutphen, a certified financial planner and president of Intrinsic Wealth Counsel in Mesa, Ariz. “It costs less to rent than it does to own. There’s no maintenance costs, there’s no property taxes and sometimes utilities are included.”

Downsize to a smaller place. Once your children move out of the house, you don’t need as much space or stuff. “Downsizing to a living space more appropriate for current needs can be additionally helpful if moving from a multi-story to single-story home, i.e., eliminating stairs,” says Andrew Carle, founding director of George Mason University’s Senior Housing Administration.

Lower your cost of living. Retirees no longer need to live in expensive areas near the office or in good school districts. Sometimes moving even a short distance can result in a drastically lower cost of living.

Outsource home maintenance. In many rental agreements, it is the landlord’s responsibility to maintain the property, including the lawn, exterior of the building and many of the appliances. You are “shifting the burden of home maintenance and repair to the landlord,” Carle says. “This includes interior, but also exterior things like lawn maintenance and snow removal.”

One phone call for repairs. When something breaks, you don’t have to spend your day finding a person to conduct the repair or getting price estimates. You simply call the landlord or administration office and put in a maintenance request. “A lot goes wrong with older homes and that’s why a lot of people want to relocate,” says Debra Drelich, a geriatric care manager and founder of New York Elder Care Consultants. “You don’t have to deal with it when things break — you just call the super.”

Live near the amenities you use. Some retirees choose to relocate to a walkable location near stores, parks and recreational opportunities. “You can walk to things like shops or the theater,” Drelich says. It can be useful to base yourself near public transportation in case you reach a point when you no longer want to drive.

Relocate near family. Retirement can be an opportunity to move closer to your children and grandchildren. “If you rent close to your family or children or grandchildren, you have less travel expenses to see family,” Van Zutphen says. You can also help each other with childcare and eldercare as needed.

More flexibility. Renting gives you the flexibility to experience a new location or lifestyle without a long-term commitment. “Renting gives you an opportunity to try out a place and see what a place is really like to live in,” Van Zutphen says. “Rather than buying right away, you can rent for a full year and see if you can imagine yourself living in Florida or Arizona.”

Find age-appropriate features. Retirees can select apartments with amenities that will allow them to live independently for as long as possible. Features to look for include apartments with a minimum amount o stairs, convenient laundry facilities and handles in the shower. “I live in this 95-year-old house with many flights of steps, and this is not the house I am going to be able to grow older in with all the steps,” Drelich says.

Extra help is sometimes available. Some senior housing arrangements allow you to live independently for as long as you are able to, and then offer increasing levels of services as you need them. “For those who are getting older, there’s independent living, and then when you need it, there is assisted living and nursing homes and long-term care,” Van Zutphen says. Many senior communities also offer the added bonus of social activities for residents and a chance to make friends.


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