When Jeanine Consoli, a retired teacher embarking on a second career as a freelance travel and food writer, and her husband, Tony, decided to sell their townhouse in Bucks County, Pennsylvania, and move to Florida, their first thought was to buy one. House.
But the couple struggled to find a home in their target market of Sarasota, which was hot.
“The realtor canceled on me three or four times, saying, “Sorry, the property is under contract now,” Jeanine, 57, recalled. “That’s why we decided to rent.”
It turned out to be the right choice for them. The couple found an affordable two-bedroom apartment in a building that Janine says resembles a Brooklyn-style brownstone (except it’s pastel-colored). It’s close enough to Tony’s office that the 58-year-old insurance executive can walk to the office rather than fight traffic.
“We’ve lived in this apartment for a year and we love it,” says Janine. Although the couple still has plans to buy a house, renting has given them the opportunity to take their time and get to know their new hometown better.
Whether you’re already retired or getting ahead of yourself by moving soon to your final retirement destination, if you’ve been a longtime homeowner, you’re faced with an important choice:
The Consolis rent an apartment in the pastel-colored building on the left, but say they plan to buy a house in Sarasota in the near future.
Thomas Simonetti
“The Last Question”
Retirement planners and relocation experts say it depends on a number of factors, including your financial situation, the housing market in your new location, how well you know the area and how confident you are that it’s your last move. Both choices have potential pros and cons, so you need to find a balance that works best for you.
“Rent or buy may be the ultimate question facing relocating retirees,” said Mark Charnette, founder and CEO of American Prosperity Group, a retirement planning firm in Pompton Plains, New Jersey. “No one option is superior because it really depends on each retiree’s situation.”
About three-quarters of baby boomers own homes, but recent data shows that rate is beginning to decline, said Doug Ressler, senior analyst and managing director at real estate research firm Yardi Matrix.
“I think we may be at the beginning of an inflection point where the number of boomers renting will increase,” he says.
Here are six questions to consider when deciding whether to rent or buy when you move.
1. How are your finances?
While home rents have increased during the COVID-19 pandemic, renting generally remains a cheaper option than taking out a new mortgage, Ressler said. According to data from Yardi Matrix and Moody’s Analytics, the average monthly rent in the first quarter of 2023 was $471 less than the average mortgage payment based on a 30-year fixed-rate mortgage with a 90 percent loan-to-value ratio (the ratio of property value to loan balance).
It can cost significantly less to buy in the long run if you can pay cash for a home or put down a large enough down payment to secure a low monthly mortgage, says Derek Miser, an investment adviser and CEO of Miser Wealth Partners. Knoxville, Tennessee. But upfront costs like closing costs can be high, he notes, and ownership means ongoing costs for property taxes, homeowners insurance and maintenance.
With a rental, your upfront costs are lower – typically a security deposit equal to one or two months’ rent – but rents can increase significantly from rental to rental. Between April 2019 and April 2023, the median home price in the U.S. rose more than 20 percent, from $1,619 to $1,967, according to Rent.com, a listings website.
2. How much do you want to make your life easier?
Moving from Huntington, New York to St. Petersburg, Florida in 2021 made life a lot easier for Chris McDonald. “I sold my house, which was difficult to maintain,” he says. “I have arthritis and it also needed a lot of repair.”
MacDonald, 70, who works part-time as an online tutor, rents a condominium in a 55-plus complex where she doesn’t need to fix anything and has four swimming pools.
After years as a homeowner, Jeanine Consoli also enjoys the reduced responsibilities of apartment living. Instead of a three-story townhouse, “we now have a two-bedroom, one-story house,” he says. “It’s easier to clean, easier to freeze, easier to store.”
“The desire for simplicity can be a big factor for people,” says Barbara O’Neill, a retired Rutgers University professor and author of the book. Flipping the switch. your guide to happiness and financial security in later life. “Not doing house maintenance, mowing the lawn or shoveling the snow.”
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