To define retirement, it is a period when a man or woman decides to permanently leave the workforce behind. The traditional retirement age is 65 in Nigeria and most countries. National pensions are also always put in place to aid the retirees to settle into this new lifestyle with ease.
In a general sense, retirement is the time of life when someone no longer needs to work to live comfortably. During this period you can rely on savings or passive forms of income.
The Nigerian housing market is hot as it is already. And as someone retiring or in retirement already finds out if it is a great idea to buy or keep renting a home.
RENTING A HOME DURING RETIREMENT
As a retired person or during retirement, it’s beautiful if you want to try new locations. In this case, renting temporarily is fine. Renting is also the best option when you anticipate moving frequently early in retirement. However, the longer you rent in retirement, the riskier it becomes.
Buying a home usually makes more sense if you plan to stay for at least five years. This is long enough to recover the costs of buying and selling the property.
From a short-term view, renting seems better, cheaper, and more achievable than buying a home. Renting while in retirement has another downside which is, missing out on appreciation values that comes with buying a house.
RENTING DURING RETIREMENT BRINGS INSTABILITY
If the rent keeps going up or runs into an issue with your renter, you as a retiree have run into a risk. And that’s the last thing you want. Rising rent could be a hard pill to swallow if your retirement income doesn’t keep up with inflation or your rent increases faster than your retirement income.
YOU CAN’T EASILY GET OUT OF A LEASE WHEN RENTING
A lease is a contract to grant someone the use of an asset, it could be a house or apartment. Usually for a specified period of time, in exchange for regular payments. While renting involves a tenant periodically paying a property owner (landlord) money to live in a house or apartment. If you’re leasing a property, your stability lasts only until the end of your lease.
If landlords want to reoccupy the home or sell it and cash out their equity, they will refuse to renew your lease. This results in you being forced to move sooner than you planned.
Therefore, scrambling to find someplace else, at an even higher rent. And moving becomes more difficult with age. Imagine being in such a situation at the age of 70? If you choose to break a lease early, it will cost you too.
BUYING A HOME DURING RETIREMENT
This is saying goodbye to your money in a landlord’s pocket. Fast forward to situations when you may want to sell, or do a reverse mortgage and tap into the equity you’ve built in the home. Buying a home is just like storing cash in a real estate asset.
You won’t be able to hand down your property to family members if you’re renting. That’s why it’s beneficial to buy a retirement home and have an asset for the family to inherit.
Isn’t that a good way of leaving a legacy? Handing down your home to family is another advantage to owning real estate during retirement.
Brent Housing has the expertise that can save you from difficult situations that may arise when in retirement. Click here now to speak to a real estate professional.