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.
There’s plenty of research out there I suggest you look.
Okay, here’s your research through Mutual of Omaha:
Pros
Stay in your home and keep full ownership
Receive tax-free cash to use as needed
No monthly mortgage payments required
Over 1.3 million seniors have used this loan to access their home equity
Flexible payment options: lump sum, monthly payments, or line of credit
Cons
Upfront and ongoing fees may be higher than traditional loans
The loan balance and interest grow over time
If 1.3 million people have used this outlet, then it must have worth. It can sometimes be expensive from what I see, but it is a viable way to pay the problem. I called it an option. You came out with strong “no.”
Okay, if the research is out there that it shouldn’t be an option, then show it to me. I never said it didn’t have pro and cons, just show me where it is not an option from the information we were given.
wy69
“If you decide to go with an HOA or Assisted Living make sure all increases are locked in.”
Look at the finances of the HOA.
How long until foods need replaced?
Other repair items.
Is the HOA budgeting for that?
That’s a big deal .
I’ve seen it first hand as a mortgage lender and property owner.
Buyers never ask to see the budget; they should ask .
I’ve always rented. Used the interest I’d be paying a bank as investment funds. I’m retired with a huge account.
It’s not my job to do anything for you. That’s your job and if you want to do a reverse mortgage do it.
I know I’m going to get flack for this...but Prop 13 is a massive regressive wealth transfer from the young to the old...why keep taxes artificially fixed depending on an asset you own, while those without said asset don’t benefit.
—
No flame, but return question why should someone be taxed for a potential profit (increase value of the home) or more importantly why should someone on social security that has lived in the same home be forced to sell because they can not afford the property tax?
A relatively few stay in the same home they bought 40 years ago, and the way it works is when sold, the property tax is reset to the new number. Over time every home will have turned over and the property tax will go up.
I asked AI for a better answer, here is the results
Yes — it’s **safe to say** that:
### ✅ The number (and percentage) of homes in California with a **1975 base-year property tax assessment** is **declining** over time.
And…
### ✅ It will **eventually reach zero**, assuming no major policy changes.
## Why it’s declining
Under **Proposition 13**, property is re-assessed when:
* It is **sold** (change of ownership),
* It undergoes **new construction**,
* Or under **certain inheritance events** (some of which trigger reassessment, others don’t depending on Prop 19 rules).
That means:
* Every time one of those events happens to a home with a 1975 assessment, the base year is updated to the new market value.
* Over time, as original owners move, sell, pass away, or renovate, the old assessments are being replaced.
## Will it reach zero?
Yes — **eventually**, all properties that were assessed based on 1975 values will either:
* Be sold or transferred,
* Be rebuilt or improved significantly (triggering reassessment),
* Or passed on in ways that now **trigger reassessment** under **Prop 19 (passed in 2020)**.
### Prop 19 closed many loopholes:
Before Prop 19, children could inherit property and keep the low Prop 13 base-year tax in many cases. Now, this is **much more limited**, especially for non-primary residences.
So the aging population + Prop 19 = accelerating reassessment of old properties.
## Rough outlook
* In the **1980s**, \~40–50% of homes had 1975 base-year values.
* By the **2020s**, that dropped to \~15–20% in many counties.
* In **20–30 years**, it’s plausible that **almost no homes** will retain the 1975 base year — possibly near **zero**.
Of course, this assumes the law doesn’t change again to allow broader inheritance transfers or similar exceptions.
Would you like a visual or projection graph of how that decline might look? I can generate that.
As you can see eventually those that benefit from the 1975 tax assessment will be zero and then normal turn over will result in homes being re-assessed at a new rate,
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