Home Ownership vs Renting

When you plan to retire in the future, you may need to consider different option in some aspects of your retirement life. This would probably include whether to consider renting out of having your own house to live in. At most times, retirees may need to sell their homes because one may prove to be too big to maintain, especially when all the kids have already grown up and have left the nest, so to say.

When considering whether to buy a smaller home or renting out a condo to live your retirement years, it is important that this should fall neatly into your overall retirement plan. both choices have their own advantages and disadvantages. How you would look at it and how both options would work out in your own plans would help determine your final decision.

When deciding on whether to rent out a place or downsizing to a smaller home that you wish to own, there are some things that you should think about. One of the these things would be your available budget for renting or home ownership. You should be able to determine how much you would be wiling to spend for either renting a place or owning a home including the taxes it may involve. Renting might involve little computation when it comes to taxes since rental costs are not tax deductible. On the other hand, home ownership may bring with it some complications later on in terms of tax computations.

Despite the complications, home ownership would also have some advantages in that it may provide you with some gains in such an investment, depending on the market values of the period. But then, home ownership may also entail some financial risks on the part of the owner which includes its maintenance and insurance costs which may considerably be higher than the cost of renting.

Although home ownership can be considered as a substantial investment, it should also be considered as a major cost of living. When you plan to live in the home, it should not be considered as an investment asset since it might not provide immediate liquidity for the owner. But with planning to rent it out, then and only then that such a home should be considered as an investment. But the subject here would be opting living a retirement life in an owned home or a rented one. In this case, retirees should avoid poring over the investment side of home ownership when deciding whether to buy a smaller home or rent one to live in.

 

Posted by Ardent Editor on Apr 16 2008 in Retirement Life

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