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.
In Hawaii, so many properties have an “ohana” building with small square footage — supposedly for family to live in. (”Ohana” means family.) But most of them are rented out to anyone.
We’ve met people while cruising who live on cruise ships. They say it’s cheaper than most alternatives on land. Some stay put on one ship, but most move from ship to ship depending on itinerary, cost, etc. Have heard there are ships for this sole purpose, but don’t know about that for sure.
Size matters.
When I bought my brick home thirty-five years ago as a single, I wanted a home that I could live in through retirement.
I “downsized” to 1200 sq ft then.
No regrets.
It seems, less is usually more.
Same here. No rent or mortgage for 35 years. At my age I do have to have people come in and do some work for me. Bought a vandalized wreck of a home in 1989, rebuilt it. NO PAYMENTS for 35 years.
Ultimately, we’re all just renting.
I like that “year in advance”. A relief for both, indicative of the long-term understanding.
Agree! As a long-term mortgage professional owning your own home is the single best way for the middle class American to build wealth. Renting is pretty much for those who cannot afford to buy a home. In an apartment complex you cannot pick your neighbors and they are practically in your lap. If you can manage to own your own home do it.
“Oh, no, my parents aren’t going to maximize my inheritance! Please advise pronto!”
Yes, I don’t want my husband shovelling snow, etc.
Where I am there are all sorts of ways to get out into Nature; we’re never bored. The only things I’d miss would be a flower/herb garden but I can do that on a balcony. I onee thought I’d like to have chickens but mucking out, especially in Summer, seems more miserable the older I get...
I owned for 40 years and now I rent and love it. No down payment money tied up, half the monthly expense, no maintenance, and I can easily move. I put my money in stocks and reaped the benefits ... Bigly.
I vote owning your home if you bought it while young and in the right state.
We bought our in 1985 in California. California has Prop 13 with limits how much property taxes can go up each year, every home in a neighborhood could be paying different amount of property tax depending on when they bought it. (note - when sold the property base becomes the new purchase price)
Our home has been paid off for years. So all we owe for the home is property tax and home insurance which pro-rated monthly is a little over $250 a month. Try renting anything for $250 a month.
As for maintenance. Leading up to retirement we began replacing appliances and things like the water heater and air conditioner. We also had a new roof put on and the house painted. So once retired we have had no maintenance issues.
So we can live on Social Security if we had to (we don’t so we don’t).
Cons to renting
.Hope one of the renters don’t’ burn down the joint
.Your car has sign on it parts 4 you
.Noise and lots of it and often
.Maintenance when sober or not stined
.All the renters want’s to be your friend knocks on door often
I haven’t had any of those problems as a renter for over 20 years.
Not all apartment complexes are the same. You have to do research and be ready to pay for what you want.
“In Florida it’s possible to have a “mother-in-law Suite” that’s a free-standing home on your property. “
A MIL suite is part of the original house.
An ADU is a fre-standing residence.
That’s up in the air with many people. Please explain your thoughts.
wy69
Retired 3 months ago. I can’t imagine my kids getting involved in decisions like this.
I’m enjoying my first year without a mortgage. It is awesome.
It's all about the money with you, isn't it? Where I live, there are no million dollar homes.
You have to do research
Not many options on California unless your willing to pay $3.500 plus a month and they are not much better.
In my experience, modern apartment buildings are being built much better than old ones - in some ways.
New buildings are much safer, with sprinkler systems, much quieter (we never hear a peep out of neighbors). and often have secure garages. The down side is that they tend to have small rooms, and no cross ventilation. (I hate the latter because I prefer fresh air and good circulation to air conditioning.)
Of course, you do have to pay a lot for the benefits. it all comes down to what is important to you and worth the cost.
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