Posted on 09/05/2025 7:55:36 PM PDT by SeekAndFind
Dear Chuck,
My parents are retired and have a very low interest rate on a small amount of remaining mortgage. They told me they want to sell their home and rent, thinking they will save money. I am gathering information to help them. Would you suggest they rent or keep owning their home?
Retired: Rent or Buy?
Dear Retired: Rent or Buy?
It depends. I don’t have the full financial picture of your parents, so I don’t want to give advice based on false assumptions. Let me disclose a few assumptions from your question:
Renters by choice
Many people who are 55 and over desire financial flexibility. Rather than having the majority of their money tied up in a home, they prefer to rent. They realize a home is not the most liquid asset.
Some no longer want the responsibility of maintenance and repairs. Losing a spouse, physical limitations, and the desire for a more flexible lifestyle can play into the decision. I call this “renters by choice.”
Prepare for a deeper conversation
Try talking with your parents about their financial situation, desired lifestyle, and long-term goals. Have they personally sought wise counsel — especially from those who are older than themselves? Are they seeking financial margin due to consumer debt or medical expenses? Do they have a lien against the property? What is the driving force?
If the home is paid for, how do they plan to use the equity? Will they have to pay capital gains taxes? Have they considered downsizing to a low-maintenance housing option, in which case HOA fees must be considered. My wife thought she found an incredible deal on a condo until we discovered the fees were outrageous. If they want to rent, can they support that lifestyle indefinitely? Are they healthy? What is their life expectancy? What sources of income do they have or expect?
Growing trend
FoxBusiness.com reports that renting is a growing trend among those 55 and older. Rising property taxes, insurance, and repair costs are major factors. People want a simpler life so they can pursue traveling and hobbies. Some find it lonely (and expensive) to occupy the big homes in which they raised their children. The widowed, single, or divorced sometimes desire a community that their home or neighborhood may not provide.
Insurance is up
Consumer Federation of America: Between 2021 and 2024, property insurance premiums rose an average of $648 a year. Premiums increased in 95% of U.S. ZIP codes, with a third increasing more than 30%.
Taxes are up
National Association of Realtors: Taxes have increased across all states. The national median annual real estate tax surged by 23% between 2019 and 2023. It represents 4% of the median annual household income. Twenty-seven states recorded hikes of 20% or more, with Florida experiencing the largest rise, followed by Wyoming, Louisiana, Indiana, Georgia, and Utah.
The following information is for anyone, regardless of age, when deciding whether to purchase or rent a home.
Pros to buying/owning
Pros to renting
Cons to buying/owning
Cons to renting
Whether buying or renting, housing costs should not exceed 30% of one’s monthly income. Analyze objectively, not emotionally, and compare apples to apples. Costs are in the details, like age of structure, square feet, lot size, location, etc. Most experts advise against buying if the owners do not plan to be there for a number of years to recoup the costs. My rule of thumb is to plan to stay at least five years.
Redfin suggests answering the following questions:
Helpful Zillow articles:
Remember, this is not our home
“In my Father's house are many rooms. If it were not so, would I have told you that I go to prepare a place for you? And if I go and prepare a place for you, I will come again and will take you to myself, that where I am you may be also” (John 14:2–3 ESV).
Keep an eternal perspective when you talk to your parents, being mindful of three financial milestones: making it to the end of the month without running out of money, making it to the end of life without running out of money, and preparing to stand before the Lord to be evaluated for stewardship. Talk to them about each of these milestones, and see what is on their heart.
Hopefully, you can support them and help them whichever way they decide to go.
Walking through a functional budget is a good place to start, and Crown has free tools that can help. We also offer a variety of calculators that can help with making financial decisions.
Chuck Bentley is CEO of Crown Financial Ministries, a global Christian ministry, founded by the late Larry Burkett. He is the host of a daily radio broadcast, My MoneyLife, featured on more than 1,000 Christian Music and Talk stations in the U.S., and author of his most recent book, Economic Evidence for God.
Selling a paid off home and becoming renters will not save them money unless they rent a studio rat hole for $700 a month or less with utilities included.
Paid off house has insurance, taxes, utilities, upkeep.
Renting includes insurance, taxes, utilities, upkeep, and profit margin for the owner.
This is not that difficult.
I’m a landlord. A couple of years ago I started getting panicked calls from former renters who wanted to know if I had anything...ANYTHING available. They had all upgraded to larger, better homes over the years. Suddenly, the market had changed, and their new rental homes were sold out from under them. Most leases go month-to-month after the first year. So, there’s no assurance you won’t be thrown out with just thirty days’ notice. Even if you have a lease, it’s still possible for the owner to sell the home, either because of a clause in the lease or because suing to enforce a contract is very, very expensive. Renters don’t generally have the wherewithal. (These sudden market shifts seem to be on an eight-year cycle.)
If you can own a home, it’s better to do so.
Also, I’ve known several people who moved from a home into some sort of retirement or assisted living. No good stories there, either. If you can remain in your own home and have assistance, come in, you’re much better off.
Unless one has a HUGE mortgage, owning is the safest way to go for those on a fixed income. A 2 bedroom apartment can go for well over $2K a month because you also pay for their taxes and insurance...and for utilities. And, unlike a mortgage, rents can go up every year.
Owning a condominium is kind of a happy medium. The fee paid to the HOA is probably worth it unless they abuse their power to make certain rules.
Worse idea ever is a reverse mortgage.
Thank goodness landlords never pass along those expenses to their renters. /s
I am in the process of building a tiny home next to my house.
The plan is to have someone live next to me who can help when I can no longer take care of myself.
your mom has an awesome set up
but as you say - she probably deserves it
Yeah, such a burden for the kids to have to get rid of a house bought at $75k but can put it on the market today for a couple million today.
“I am in the process of building a tiny home next to my house.”
In Florida it’s possible to have a “mother-in-law Suite” that’s a free-standing home on your property. I’m told that when you do this they check to see if there’s a blood relationship with whoever moves in. There’s nothing about this not being used as a rental after the builder moves out or dies. But as far as permits go, absolutely not. If you’re building this in a or close to a highly regulated single family home neighborhood then the county can order you to tear it down. Please make certain you haven’t sabotaged your future with an unlicensed construction.
Having retired in 2019 my home will be paid off next year......I’m sure my answer is obvious 😏
If you need nursing home care, Medicaid will demand you spend down your assets before they will pick up any cost.
It might be good to have your kids buy your home, and then rent it back to you.
Thank you for the information...I am in a rural area and am very familiar with building regulations (I am bookkeeper for a construction company).
Condos probably make sense for older folks. I'm in my 50's with a refurbished colonial on a good chunk of property that somehow always needs more refurbishing. It's constant work but it's all good. Still, I can't imagine wanting to be raking, snow plowing, tending the gardens, chopping wood, painting, repairing fences, mowing lawns and field, taking care of the chickens, etc. twenty or thirty years from now.
Then again, it might be boring sitting in a condo with people living right next to, or on top of you. Maybe RV?
Sounds like a perfect life!!
Everyone is different but for me I could not fathom living in an apartment or condo. That would be like living in a jail cell. I need my shop to work and tinker in. I enjoy my large yard with a sizable shed I built. Can’t imagine being cooped up in a smallish unit to stare at the walls and pace around the hallway in the winter. I’d go crazy.
“There is no shortage of peeps/local companies that can be hired to do the upkeep/maintenance one no longer wants to do.”
Ideally. It’s tough finding DEPENDABLE people to do that. At least, it has been for us. Some we’ve found do an OK job with the basics, but nobody cares as much about your home as you do. So you either resign yourself to imperfect, finish the job yourself (if possible), or move on.
I was raised to believe that one should always own the roof over one’s head. We’re close to paying off our mortgage and plan to stay in this house until we die or have to have assisted living. I would feel nervous about not owning the house I live in.
Sounds like us — without the military aspect. (Unless being Contractor for DoD counts, which it doesn’t.)
We lived way, WAY, below our means for decades. It has worked out for us in retirement.
“I don’t owe ANYONE anything and certainly feel under no obligation to give up what I worked for my entire life to appease some selfish, entitlement mentality minded, ingrate.
They can do what we did. Buy a fixer upper they can afford and work on it themselves and scrimp and save like we did.”
Exactly!!
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