Why do people choose to rent a condo when they can afford to buy and own a house? Condos aren?t cheap and doesn’t renting a townhome or condo take away the pride of ownership you get from owning a home? These are two of the common questions people have when considering a condo. It?s these types of questions that present different answers depending on your age.
Condominiums are most popular among people that are retired, and the average retirement age in the United States is 63, so condos are most popular among people over the age of 63. Many young people don?t even consider townhomes for rent as an option because their interests and their priorities are different than retirees.
Michael Finke, a professor at Texas Tech University on retirement and personal financial planning, analyzed data on the satisfaction level of homeowners versus renters between the ages of 20 and 90-plus. He found a significant drop later in life. As individuals get older, they are less likely to be satisfied owning a home. The most significant decrease was around the age of 80. The simple act of owning a home is no longer a source of personal joy and pride. Rather, the focus turns more to the need for upkeep, repairs, and ongoing expenses, which are eliminated if you rent a condo.
When a retiree decides to rent a condo, they are dramatically cutting their housing-related expenses. According to the Center for Retirement Research at Boston College, taxes, insurance, upkeep and utility bills run approximately 3.25% of the value of the house. By renting a condo, retirees are reducing or eliminating these expenses, which will allow them to live comfortably while taking less out of their retirement savings on a monthly basis.
Additionally, while condos are not cheap, they are less expensive than houses. For example, in Boston, a 2,400 square-foot town home style condominium will cost roughly $725,000. While that is a lot of money, a single-family home in the same area and approximately the same size will cost over $1 million. Boston is just one example. In most areas, you will find that condos are less expensive when compared to single-family homes to buy, which is an added saving in addition to the lower monthly expenses.
According to the National Bankrate survey, three out of every five Americans will move to another city or state when they retire. This means people aren?t staying in the homes they may have been living in their entire adult life. They are selling those homes to move somewhere else. Weather is often a significant factor in that decision making. This survey took into account gender, income, and education, and there was no difference found. Across the board, as people got older, their interest in moving became stronger, which is when the idea to rent a condo becomes most prevalent.
While the majority of those interested in condos for rent or condos for sale are retired, they are not the only group that condos are ideal for. Frequent travelers would also greatly benefit from owning or renting a condo or townhome. Houses require constant maintenance and being gone for extended periods of time can put your house at risk of vandalism or simply not being aware when things break down. There is also the regular maintenance like lawn mowing that you need to arrange for if you are out of town. However, with a condo, the maintenance and upkeep are taken care of, so you don?t need to worry about things while you are away.
Regardless of your age, if you’ve ever considered renting a condo, you may be on the right track. It doesn’t matter if your prime interest is in reducing expenses or eliminating the need to worry about maintenance and upkeep, there are many benefits to renting a condo or townhome. Talk to a professional to learn more about your home buying or renting options.
