The Big Retirement Question: Should You Rent or Buy?
Planning your retirement? Ideally you should start thinking about your retirement long before you retire, but it’s more likely you won’t think too hard about it until it’s nearly upon you. You’ve been looking forward to this time for a long time, but there are some big questions you need to ask yourself. Is your pension enough to support you? What are you going to do all the time? And should you own or rent your home? If you already own a house, it’s tempting to sell up when you reach retirement and either downsize or buy somewhere more accessible, or keep the cash and start renting. There are pros and cons to doing both of these things, and there’s no one answer that suits everyone. So which one is right for you?
If you need the security of a permanent home, you may prefer to own. If you have already paid off your mortgage or are buying a new house without one, you don’t have to worry about missed mortgage payments. No one will take your house from you, and you can stay as long as want. However, if you rent, you run the risk of reaching the end of your tenancy and being asked to leave. You can sign a contract for a longer tenancy, so you’re guaranteed the house or apartment for two or three years. But you never know if the landlord will want to continue renting to you. Renting may have some bonuses in this area too. If you would rather move around, renting is perfect. You don’t need the security of a permanent home if you want to spend a lot of time traveling, for example.
Often when you reach retirement, you realize that your home is just too big. Now that the kids have moved away, you don’t need as much room. If you choose to downsize, you could do it through selling and buying a new place or choosing to rent. Either way, you should end up with some extra cash, depending on the value or your old and new properties. Ask an estate agents in Thornbury about having your home valued, and work out whether you would be better off if you downsized.
Many people reach retirement and realize that their pension won’t be enough to support them. You can continue to work part-time or even set up your own business, but another option is turning your physical assets into cash. If you own your house, you might prefer to sell up and rent somewhere instead. Selling your house frees up the money tied up in your property, so you can use it to support yourself. Of course, that does mean you need to pay rent (unless you live with a relative). But you could find yourself with a bigger budget if you sell, even if you start renting. This option isn’t for you if you were planning on passing your house to a family member or friend when you die. But if you don’t have any particular attachment to your house and will happily move out, selling up could improve your finances significantly.