Are Retirees Better Off Renting a Home?

Are Retirees Better Off Renting a Home?
Photo (cc) by cameronparkins

To buy or to rent? It’s a question many people ask at least once in their lives, but it can be more complicated for retirees.

Real estate website Trulia says the decision is made more difficult for retirees because they must consider another factor: whether they want to leave behind home equity as inheritance.

In Trulia’s new analysis of the best places for retirees to rent or buy, the real estate data website found that for retirees who want to pass down home equity as an inheritance, buying a retirement home is “almost always” cheaper than renting one.

However, the site found that for retirees who do not care about passing down home equity, renting is cheaper than buying in 98 of those 100 cities. According to Trulia:

This is because the value of the equity in a home is a significant contributor to the financial benefits of homeownership. If we leave out this value because retirees don’t care about it, the benefits of homeownership compared to renting fall.

For its analysis, Trulia examined the 100 U.S. cities with the largest share of residents aged 65 and older.

The two cities where it’s cheaper to buy than to rent are The Villages, Florida, and Danville, Virginia.

For retirees who want to leave home equity behind, Trulia found that the Sunshine State is the place to be. The cities that offer the largest financial advantage of homeownership are all in Florida:

  1. The Villages, Florida
  2. Naples, Florida
  3. Venice, Florida
  4. Delray Beach, Florida
  5. Deerfield Beach, Florida
  6. Marco Island, Florida
  7. Pompano Beach, Florida
  8. Englewood, Florida
  9. Titusville, Florida
  10. Hallandale Beach, Florida

Have you decided whether to rent or buy in retirement? Share how you made the decision — leave a note below or on our Facebook page.

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