6 Reasons More Baby Boomers Are Renting

When many people hear the word “renter,” they picture some young, fresh-out-of-college millennial or even someone a little older who still prefers flexibility over stability. But these days, millennials aren’t part of the only generation looking for apartments. More baby boomers (the generation born after World War II between 1945 and the early 1960s) are starting to return to renting after years of living in their own homes. In fact, according to data from the Joint Center for Housing Studies of Harvard University, renting increased for adults between ages 50 and 75 from 2004 to 2013.

So, why are boomers returning to renting? Here are a few reasons:

1. They’re ready to downsize. For seniors, downsizing is a term that’s often associated with assisted living, but it’s not necessary to move into a retirement community to downsize from a large home to a smaller one with fewer possessions. More boomers are looking at renting as an easy first step to retirement living. Apartments make basic cleaning and maintenance a lot easier for anyone. Consider the difference between a two-bedroom apartment and a two-floor home – which one’s easier to sweep?

2. They are looking for convenience. Speaking of maintenance, in most cases, renting means a lot of maintenance issues are no longer your responsibility. The air conditioner isn’t working? Call the landlord or property manager. For seniors who’ve been responsible for house and property maintenance for years, having someone around who can fix a plumbing issue and mow the grass is a huge benefit of renting. Not only that, but some of the larger stresses that come with owning a home (like needing a new roof or hot water heater) aren’t even a concern for renters. In that way, it can be a huge relief to opt for convenience over stability.

3. Renting offers more flexibility. Whereas buying a home or condominium is a big commitment, signing a one- or even two-year lease is a much shorter-term contract. So, for boomers who are interested in living somewhere new each year or trying out a new city or town before making a permanent commitment, renting can be a valuable option.

4. It’s often cheaper. Between mortgage payments, property taxes, condo association fees, house maintenance and overall higher costs of living, buying is often much more expensive than renting. And for seniors who are looking to preserve their retirement savings for as long as possible, this can be a serious consideration. While buying can be a good investment in the long term, if you’re planning on living somewhere for only a few years, renting can be a more financially sound option. Plus, renting in trendy neighborhoods can often be less costly than buying a home in the same area – that means seniors have a little more flexibility when it comes to living in neighborhoods with amenities and entertainment options.

5. They want to avoid having to sell later on. Selling a home once is stressful enough, which is why purchasing another you’ll have to sell again can be a major disincentive for boomers. If you aren’t keen on the idea of selling again in the future, renting may be your best bet.

6. They’re looking to make other investments. This may sound a little counterintuitive – you might be thinking, “Isn’t renting the opposite of investing?” However, if boomers have paid off their mortgage entirely and are looking to sell a home and downsize, the capital they can gain just from selling their house is usually pretty substantial. And if that money is added to retirement investment accounts, rather than used to purchase a new home, it can begin to accrue interest immediately, making it even more valuable.

Of course, renting isn’t the right option for everyone. In the end, your decision to rent will have as much to do with the lifestyle you envision for yourself as it will with your current and future financial situation. Consider both before making your decision.

Source:  USNews.com