Retiree Moves: Owning Vs. Renting When You’re 65+

Should You Rent or Should You Own?

Renting vs. owning a home is a big decision for anyone, and it comes with special considerations if you’re retired. In today’s blog, we’ll explore the pros and cons of renting vs. owning a home when you’re over 65+.

Reasons to Own: 

• You aren’t at the mercy of your landlord’s renovation decisions. When you rent a home, your landlord can make renovation decisions that impact you. If your landlord decides to upgrade the kitchen and bathrooms, for example, you might be forced to relocate temporarily. 
• You can’t be forced to move: When a landlord decides to sell a tenanted property, the tenant is often forced to move. In Ontario, landlords cannot ever evict a tenant during the term of a lease (for example, in month 8 of a 12-month lease) – even if they are selling the property. But it gets more complicated when a tenant is ‘month-to-month’ – if a landlord sells the property to someone who wants to move in it themselves (or move in a family member), they are legally permitted to give the existing tenant 60 days’ notice to vacate.)
• It might make financial sense to have a mortgage if you can invest your savings at a better rate of return elsewhere. You can still get a mortgage if you’re retired – provided you have the pension income to support it. 
• Free reign on decor! When you rent, you don’t have the same level of control over your living space as you would if you owned a home. This can be frustrating if you want to make changes or improvements or even paint a room. Note that all condos – whether owned or rented – usually come with some restrictions on window coverings and what you can put on your balcony or terrace.
• Continue to build equity after you’re retired. Owning a home can provide financial security, as the equity you build up in the property can act like a savings account. Depending on market conditions, you can also benefit from any increases in property value. 
• Lower Costs Over Time: While the upfront costs of renting may be lower than owning, you may end up paying more in the long run. Rent prices usually increase over time, meaning you’ll probably be paying more for the same living space in the future. In contrast, once you pay off your mortgage, your housing costs become fixed.
• Sense of Stability and Security: Owning a home can provide a sense of stability and security that renting cannot. You have control over your living space and can make it your own.

Reasons to Rent:

• Flexibility One of the biggest benefits of renting is the flexibility it offers. As a retiree, you may not want to be tied down to a specific location, and renting allows you to move easily if your circumstances change. This could be especially convenient if you decide you want to downsize further or move to be closer to family and friends.
• Minimal Maintenance Headaches When you own a home, you’re responsible for maintaining it and taking care of any repairs or updates that are needed. This can be daunting at any age, let alone if you have physical limitations or are on a fixed income. When you rent, however, these responsibilities are typically the landlord’s, which means you can relax and enjoy your home without the added stress of maintenance.
• Costs One of the best parts about renting vs owning is that you don’t have to worry about the extra costs that come with home ownership – from land transfer taxes and legal fees when you buy, to ongoing maintenance costs, property taxes, condo fees and mortgage payments. When you rent, you’ll typically need to pay the first/last month’s rent, ongoing monthly rent, home insurance, a small key deposit and whatever utilities are not included in your rent. If the home you rent was built before 2018 (or first occupied as a rental before 2018), the amount your rent can increase will be capped too, making it easier to estimate your future cash requirements. 
• Try Before You Buy If you want to try out a new neighbourhood, town or city during your retirement years, renting for a year is a great way to see if you’ll like it before you commit to buying there. 

So should you rent or should you own? There’s no one answer for all retirees, so it’s important to carefully consider your personal circumstances and priorities. Some seniors may prefer the flexibility and ease of renting, while others may value the stability and financial security of owning a home. Ultimately, the best choice for you will depend on your individual situation and needs.