First Person: Becoming a Renter in Retirement

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Some people try to pay off their mortgage by the time they retire so they won't have that extra bill. I view my home as an investment that is a lot more predictable than the stock market given enough time. I plan to sell my paid-off home and become a renter in retirement even though my friends think that's a ludicrous idea. According to a recent article by U.S. News & World Report, there are at least 10 reasons to become a renter in retirement. For me, it's about having freedom, flexibility and less hassle. I want to downsize to a no-maintenance rental townhome in a master-planned community in Florida. I also want to have that $250,000 or more equity from my house in the bank by the time I retire. I can think of several advantages to being a renter instead of a homeowner in retirement.

Paying less for a lifestyle

When I rented an apartment 10 years ago, I enjoyed all the amenities of the other people who lived in the community such as a swimming pool, tennis courts and exercise room. People who owned their townhomes paid maintenance fees of $100 a month as well as CDD or community development district fees of $200 a month on top of homeowner's insurance and property taxes. I estimate I saved $400 less a month as a renter who wanted the same amenities but didn't want to pay for them.

Simplifying my finances

As a homeowner, I have to remember to pay the home owner's association fee every three months as well as the mortgage. If my home was paid off, I'd still have to keep track of how much I owe the property appraiser's office in terms of taxes as well as the amount due for my home owner's insurance. I'd also have a separate bill for lawn maintenance. As a renter, I just pay one bill for all my housing needs. I plan to rent in a community that also includes utilities so I can cross that concern off my list in retirement.

Having flexibility to move

I don't want to be tied down to a home in retirement because my situation might change. It would be fun to live in different cities in retirement, especially if that means living closer to different friend and family members. I'd also like to rent in an urban area without having to think about whether my property value will go up or down. When I've bought or sold a home in the past, I spent thousands on closing costs. With a flexible lease agreement, I can relocate without added real estate costs.

Most of the rental units I've visited in the past few years have been decorated with all the upgrades such as granite countertops, stainless steel appliances and sleek, engineered hardwood floors. If I wanted to renovate my own home up to those standards, it would cost me upwards of $40,000. I'd rather enjoy renovations and upgrades that were paid by someone else. By the time I retire in another 20 years or so, my home should be worth at least $250,000 to $300,000. I can easily pay my rent each month with the dividends and interest I earn on that money once properly invested.

More from this contributor:

Tricks to Pay Down our Mortgage

Moving Around Put me Behind

We Bent all the Rules for Buying a Home

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