Owning gives you stability, but renting offers flexibility

Quick Summary

  • Housing costs will be part of your retirement budget, whether your rent or own.
  • Owning offers perks like stability, no mortgage, tax benefits, and equity.
  • Renting provides more flexibility, and you’ll spend less money (and time) on maintenance.

There are good reasons to own a home in retirement. But there are also plenty of arguments for renting. The latter may be less expensive if it means you don’t have to pay for maintenance and repairs. Owning, however, can be less stressful if you don’t have to worry about a landlord raising your rent.

Whichever route you go, housing costs will be one of your monthly expenses in retirement. Here are some factors to consider when making a rent-versus-buy decision.

Pros and Cons of Owning


  • No mortgage
  • Stability
  • Build equity
  • Tax benefits


  • Maintenance costs (and time)
  • Taxes
  • Difficult to move

Pros and Cons of Renting


  • Flexibility
  • Less maintenance
  • No taxes
  • Easier to move


  • Rent increases
  • No equity
  • No tax benefits
  • Less stability

Advantages of Owning

It’s easy to find arguments for staying—especially if you live in a house you own now (and can avoid moving). Here are some key arguments.

No Mortgage

If you’re one of the 70% of homeowners who go into retirement mortgage-free, the question of renting vs. owning may seem less complicated at first. Still, the fact that you have no house payment doesn’t make this a no-brainer.

You’ll have to consider property taxes and maintenance costs. And, the older your home, the higher those upkeep expenses could be.


If you own your home, you’ll likely enjoy more stability. You won’t have to worry about a landlord bumping up the rent. Likewise, a landlord can’t sell the house out from under you. You still have the option to move, but it will be your decision—not a landlord’s.

And if you do end up renting, a long-term lease could help lessen the uncertainty of rising rents.

Build Equity

For some retirees, it’s important to leave an inheritance. Others want to use accumulated home equity to take out a loan, line of credit, or reverse mortgage. These are situations in which ownership makes the most sense. In areas where property values are increasing rapidly, owning allows you to build equity. And, of course, it also means you can avoid rent increases that are so common in hot real estate markets.

Tax Benefits

One of the benefits of homeownership is that you can deduct taxes and mortgage interest. Other deductions, including mortgage points, can all work to lower the amount you owe to the IRS. You get none of these tax perks if you rent.


The degree to which you’re emotionally tied to the idea of homeownership is an important, nonfinancial consideration. Selling your home and moving into a rental apartment or home shouldn’t be stressful. Also, keep in mind that you can’t remodel a rental, at least not without the owner’s permission.

Advantages of Renting

You may already rent and know these benefits. But if you’re a homeowner contemplating jumping ship, here are some reasons to consider.

Keep Your Options Open

Renting may make sense if you’re an empty nester, ready to downsize, or unsure of where you’ll spend your retirement years. You may want to move away for better weather (or a lower cost of living) for some years, and be able to easily return closer to your family later on.

Your health—or that of a family member—can also be a factor if you believe you may need to move soon to receive or give care. Many assisted living or independent living communities are rent only, leaving you with no choice if that’s where you’ll live.

Spending Less in General

It’s important to compare the cost of renting versus owning in the place where you plan to live. According to a report from Trulia, renting was less expensive in 98 out of 100 cities with a large population of residents 65 and older. It’s worth noting that in the South, owning is typically less expensive than renting.

Less Maintenance

When you rent, you will likely not have to pay for maintenance. On average, homeowners spend between 1% and 4% each year on upkeep. The older the home, the higher the number. One caveat: Make sure your landlord is responsible for all (or nearly all) maintenance and repairs, especially if you’re renting a house.

It’s not just the cost. As you get older, your ability to do any of these jobs yourself will inevitably decline. Maybe you don’t want to live somewhere that finds you regularly standing on ladders to change the light bulbs. That’s when a super or building handyman can really help.

Freeing Up Investment Capital

Renting may free up money that you can invest. That can increase your overall income during your retirement years. Investments often grow at a faster rate than real estate appreciates, making them an even better use of your money. Also, ownership puts you at risk in the event of another housing-market crash—something renting does not do.

You May Be Able to Do Both

Some retirees rent a home in an area where ownership costs are prohibitive and buy property elsewhere, renting it out as an income-producing investment. With proper planning and careful shopping, this arrangement can give you the best of both worlds.

Alternatively, you may want to rent for a while (10 years is optimum) and invest the savings. At that point, buying will likely be more of an advantage.

Compare Your Options

When it comes to renting vs. buying, what’s best for someone else may not be right for you. Compare the advantages and disadvantages of both options given your cash-flow needs, lifestyle plans, and emotional attachments. There’s no right or wrong answer, only the one that works for you.


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