House: Buy or Rent
June 29, 2016
Buying Versus Renting Your House in Retirement
If you are ready to retire, and have identified your retirement state or region, two of the biggest questions that you may be facing are: Where in that general area should you move to? And should you rent or buy?
Trulia, the real estate listings and housing data site, recently ran a feature which asked whether it was cheaper for retirees to rent or buy, and where in the country it was cheaper for them to rent or buy.
Their conclusion was that buying a retirement home is almost always cheaper than renting one, and that retirement communities (like over 55 communities in Delaware) offer some of the best deals. This calculation does depend on such important financial considerations as being able to afford a 20% down-payment, taking on a 30-year fixed mortgage, and living in that residence for at least 7 years.
Locally, the advantages of buying range from being over 50% cheaper than renting in New Orleans, to just over 14% cheaper in Honolulu. For retirees, buying is cheaper than renting in all major metro areas by roughly 42%. In Delaware’s Wilmington metropolitan region, this is generally how much cheaper it is to buy rather than rent.
It continues to be especially advantageous to buy in this low-interest rate environment. Thirty-year mortgages remain under 4%, and have even dropped slightly from last year to this year.
If you are looking to buy in the northeastern U.S., the advantages of buying versus renting are significantly lower in most metropolitan areas because of high real estate prices. In the greater New York and Washington, D.C. metropolitans, this is especially true—which is another good reason for looking in Delaware. Keep in mind that the very low real estate taxes in Delaware offer another significant advantage over other northeastern metropolitan and even suburban areas.
Of course, you cannot make a decision without actually visiting Delaware and its retirement communities. That is very easy to do, and represents another great advantage of this area, especially if you like to travel or have family scattered across the country. In addition to the Wilmington International Airport, Delaware is close to two major airports in Washington, DC, and major airports in Baltimore, Philadelphia, and Newark. NJ.
It is easy to make Delaware your home base for retirement while leading an active national, even international travel life.