July 9, 2013 — We continue our series of reader suggested articles with today’s installment on renting in retirement. First we will explore the pros and cons of buying vs. renting, then we’ll share some tips and techniques for find your best place to retire rental. We hope you enjoy the article, and look forward to your Comments below.
We Americans seem to have been collectively brainwashed when it comes to the belief that home ownership is a cardinal virtue. For sure, owning your home can make a lot of sense. But the truth is, renting a home, particularly for the winter, is often a much better idea for many people’s situations. Let’s start off by comparing some of the advantages of renting a home vs. buying your place to retire:
Pros of Home Ownership:
– Tax deductions. Uncle Sam helps home buyers fund their purchases with generous deductions for property taxes and interest payments
– Pride of ownership. You can fix up and decorate your place however you want – at least on the inside
– Low cost borrowing. Home mortgage rates are still at historical lows, in spite of recent increases
– Appreciation. You have the possibility that the value of your home might appreciate
– Peace of mind: You know where you are going to live next season. No need to scramble to find a new rental every year, and then either move all your stuff into it, or use somebody else’s
– Fewer restrictions. Many communities, particularly active adult communities, are very restrictive about renters with pets, and about which and when renters can use common facilities like golf courses, tennis courts, and other amenities.
Pros of Renting
– Flexibility. If there is a natural disaster, your Home Owners Association gets crazy, the builder goes bankrupt, or it turns out you just don’t like your neighbors – you can just walk away
– Freedom. You are not locked into one community. If the grass looks greener, move on over
– Lower costs. Renting can be cheaper than owning in some communities
– Less worry. As you age or your health gets worse, renting means fewer commitments to unravel
– No capital required. Sometimes the only option if your savings are low, or you prefer not to tie them up in real estate.
How can you find a good rental?
This is one of the most persistent, and most challenging questions we get at Topretirements. There is no silver bullet for finding one; you will have to invest some time and energy to find a good rental. Here is our accumulated wisdom on the topic.
There are many low cost living options – it is possible to spend the winter in Florida or other warm state and pay a very low rent. If you plan on renting permanently, there are any number of communities where you can get yearly rentals as well.
– Use Topretirements as your starting point (use Advanced Search and check the “Rental” box in the 55+ communities section). We did this search recently and found 409 communities that claim to offer rentals.
– If a particular community you see at Topretirements or you have heard about elsewhere interests you, contact them directly. Use their website Contact Us link or just call them and ask about rentals.
– Do you have a friend who lives in a town or active community that interests you? This is usually the best source – have them ask around, look on bulletin boards, or even post a sign for you on a bulletin board or community media outlet.
– VRBO.com is great for finding places to rent, as is Homeaway.com, Craigslist and other ‘rent through owners’ websites. Just be careful about scams and spammers at Craigslist – never make your email public there. And don’t send money to anyone without some due diligence.
– You can use a general Search Engine like Google. Put in phrases like “January rental in (name of city)” and see what you get.
– Exercise some caution. A skilled photographer can make the worst place look pretty good. Look for comments that indicate problems. Is the price too good to be true? Are the restrictions too severe… or not mentioned? Can they give you references? Don’t send anyone money without doing some checking. Your best bet is to visit the place you want to rent before you commit, or have a friend do it for you. But remember that places will be different in summer or winter – busier, hotter, or less crowded.
– After you rent the first time it will get easier. If you like where you rented, you can probably book it in advance for the next season or lease term. Or, you can look around while you are there to find a better place for the next year.
– Book early. The best places get snapped up early. If you wait too long you might miss out.
Some rental examples
Sandy, a Topretirements member, shared her ideas a few years ago on how to find an inexpensive rental for the winter. Here’s what she said: “The Village of Casa Del Sol” in Haines City, FL provides a single unit trailer with or without a same size screened porch that you can lease for a year, and for any subsequent years. You don’t pay a monthly maintenance fee when you are not there, nor electricity or cable bills, unless you choose to keep those utilities running while you are up north. You might pay around $5000 a year for one of these.
The Villages in Florida has many rental options since it is so big and well known (80,000 residents or so). You can contact the developer, or look online for The Villages rentals by owners. TheVillages4Rent.com is mentioned as a great resource – it represents owners looking to rent their properties. In the high season (Jan-March) a home in The Villages will rent for at least $4,000 a month.
Buy, Rent, or Stay
Sandy’s Adventures Part II: How Anyone Can Find an Affordable Warm Winter Rental
Comments? We know many of our members are definitely interested in renting, while others like owning real estate. What do you think about renting vs. owning – what is the best decision right now? Tell us about your experiences renting – how did you find your place, and what were some of the pitfalls you experienced. Please share your thoughts in the Comments section below.