If you’re about to retire, you’ve probably also thought about selling your family home so you can spend less time on maintenance and more on your hobbies, keeping fit, travelling or simply relaxing
But then what? Should you rent or buy again? And if you buy, what type of home should it be?
The advantages of renting – especially if you choose an apartment or sectional title townhouse - are that you will have less responsibility for home maintenance, most likely better security than in your house, more freedom to lock-up-and-go when you like, and none of the costs associated with home buying and ownership, such as transfer duty and bond registration costs, insurance and rates and taxes.
Renting for a while is probably also a good idea if you are still undecided about where you want to settle in retirement – which could be your own familiar area, or closer to your children, or in a favourite holiday destination.
However, there are also disadvantages in renting – the most significant being the uncertainty about how much rentals might rise in future, and how you would continue to make these monthly payments, especially if you’re on a fixed income that is being steadily eroded by inflation.
If you have children, you may also worry that renting is just eating up their inheritance.