Housing for Retirement: Should a Retiree Own or Rent a Home?

1. Housing for Retirement: Should a Retiree Own or Rent a Home?

Author: Peter Oriel

Finally, you’re nearing retirement; you are about to start the next phase of your life! Some may view retirement as a sign of old age. Still, many fail to understand that it also signifies new beginnings – retirement offers countless opportunities to build new dreams, travel the world, spend more time with family, and do everything one’s heart desires without any limit.

However, to have a worthwhile life during your later years, it’s crucial to plan for your retirement. The comfort and enjoyment you experience will be relative to how much time, energy, and finances you invest in your retirement planning. Since you will no longer have a regular source of income, you must develop a game plan that addresses your needs and wants, such as travel, healthcare, and housing.

Housing for Retirement in Port Macquarie: Which Is The Best?

Housing costs will eat up a large portion of your finances. As one of the biggest expenses you’ll have, you must determine whether renting or owning a home would suit you well. This decision must be taken seriously and should be dealt with careful and thorough planning, as your living situation can risk your financial security.

No one wants to end up struggling financially after retirement – there’s nothing worse than not being able to address your retirement needs without a stable income. Both renting and homeownership have their set of pros and cons, and one option may be more suitable than the other.

However, it can be overwhelming to make the right choice with the factors involved, so we’ve listed below the advantages and disadvantages of each one. To help you with deciding your living situation after retirement, learn about the differences between renting and buying below:

Renting

When renting during your retirement, you won’t have to worry about maintenance and repair costs, as the landlord is in charge of ensuring that the place remains a safe and comfortable area to live in.

Moreover, with renting, you have the freedom to move to a different area if you want to. Since you don’t have to go through the long and arduous process of selling a home, you can simply look for another place to live in, pack your belongings, and move out.

Not only will you have choice of location, but you will have a more flexible choice in the type of property you wish to reside in. So while you might want to stay in a house with a backyard now, if you wish to travel once the borders reopen or if you want a property with less maintenance as you age, you could eventually move on to a villa or apartment.

If you already own your home or have substantial equity, you may be able to sell your home upon retirement and make a downsizer contribution into your superannuation fund which you can use to fund your retirement.

Finally, if you are eligible for the Age Pension, you may also be able to receive Rent Assistance to help fund your rental payments.

However, renting can be hard on your wallet even without maintenance and repair costs because the monthly rental payment may rise, depending on the market conditions and over time you may be priced out of desired suburbs you want to live in. Plus, if the landlord sells the property, you’ll have no choice but to move and find a different home in a short period. These are some drawbacks of renting as your choice of housing for retirement in Port Macquarie.

Homeownership

If you’re not keen on dealing with a landlord and rising rental costs, purchasing/owning a home may be a viable choice. Aside from avoiding the rent increase, you could also potentially enjoy equity growth if your property increases in value.

Unlike renting, where the risk of eviction from your home looms over your head, you get to have stability by owning a property. With a fixed-rate mortgage, your monthly payment will be the same so that you won’t have any significant changes in your expenses or if you have owned the property long-term, you may be able to pay off your mortgage before retirement and live mortgage-free.

However, when you choose to purchase a home, you may not be able to access your equity, as it could take days to months to receive funds. In addition, you won’t have as much flexibility as a renter – you’ll have to wait until you sell your home before moving to a different place.

Finally, you will need to budget for several large expenses every year including land rates, water rates, house insurance, strata fees (if you live in a multi-dwelling complex) and also have ad-hoc funds available for emergency repairs and general property maintenance to ensure the property maintains its value.

Wrapping Up

When it comes to choosing your housing for retirement in Port Macquarie, your living situation is among the most important expenses to consider. Your financial security, comfort, and happiness heavily rely on this one decision, so you must make sure to choose one that suits your situation. As long as you learn about the pros and cons of each option and receive sound financial advice, you’re sure to have a happy life after retirement!

If you’ve been struggling with your retirement planning, don’t worry! Let our wise and skilled financial consultants at Coastal Advice Port Macquarie help you make the right choice. Regardless of your age, we have the knowledge and expertise to help you plan for your perfect retirement. Book a complimentary appointment today!