Are you getting close to retirement? If so, you may wonder if it makes sense to sell your home and rent after you retire.
This isn’t an easy question to answer. Like most homeowners, you may have an emotional attachment to your home thanks to the many years of memories you have made. However, the family home that once housed you and your children may also be too large than what you need or what you want to take care of.
Keep reading to learn more about the potential pros and cons of choosing to sell your home and rent during retirement.
Why Sell a House During Retirement?
For some retirees, the opportunity to save money is what drives them to sell their houses and rent. Even if your mortgage is paid off, the cost related to owning a home will add up.
From insurance and maintenance to property taxes, owning your home can cost much more than renting.
This is the perfect time to sell their home and move somewhere closer to their family for many retirees. For others, retirement is the time to pursue interests and hobbies rather than caring for and maintaining a large home and property.
Renting provides more freedom that isn’t possible if you own your home. It doesn’t matter if you dream of traveling or if you just want to pick up and leave when desired; selling your home and renting makes all this possible.
Also, when you rent, you will see certain tax benefits. Any homeowner understands property taxes can cost several thousand dollars per year or more. For those on a fixed income, this can present a serious hardship. According to information from the IRS, married couples can exclude as much as $500K in capital gains taxes while singles can exclude as much as $250K.
Selling Your House and Buying Another
If you don’t want to rent, you can sell your existing home and purchase another. This means you still own an appreciating asset. Also, the feeling of stability goes along with homeownership.
While this is true, owning a home is still expensive. When you retire, you will likely be on a fixed income, so you have to consider if this is something you want to take on.
Selling Your House and Renting
You can also rent in retirement. This gives you more freedom, and you don’t have to worry about upkeep because that is typically the property owner’s responsibility. Even better, you don’t have to worry about property taxes.
Are You Ready to Rent in Retirement?
Deciding to rent in retirement is a big decision. However, it comes with several potential benefits. If you are ready to sell, getting in touch with a real estate agent is recommended. Not only can they help you get top dollar for your home, but they can also help you find a suitable rental property that works with your budget.