Renting is becoming a lot more popular these days. But not just among millennials. Even the baby boomers are getting in on the action. Keep reading to find out boomers’ rental habits as we uncover the reasons baby boomers will rent vs. buy.
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Reasons Baby Boomers Will Rent vs. Buy
Thinking about the boomer rentals market might sound crazy because baby boomers have always been known as people that have owned assets, bought houses, and created wealth by owning a home for a long time.
But, trends are showing that the way they see the world is changing as they get older. More than likely, that will affect the fact that they will start choosing to rent over buying. Let’s take a closer look at a few reasons why this might be taking place.
No Longer Want to Deal with Repairs and Maintenance
As they get older, baby boomers don’t want to be doing repairs and maintenance of their own. In the past, when the garage door is broken or the kitchen cabinet is broken, they’ve gone out and fixed it themselves. Now, it might be a matter that they can’t physically do it anymore or that they’ve decided they just don’t want to do it anymore.
With a rental house, they simply just call up a number, and someone comes out and fixes it for them. This process is starting to fit in a little more with their current lifestyle.
Looking for Convenience
Other things that baby boomers are losing interest in our preventative maintenance, like landscaping or cleaning the gutters. There are items that they’re no longer willing to do, again, or no longer capable of doing.
So, we believe that property management companies will start doing those types of services and offering those types of services specifically to the baby boomer generation.
The idea is that they’ll start paying one rent fee and have the whole house taken care of for them in exchange.
Seeking Flexibility
As baby boomers get older, they want to go out and see their grandkids. They want to be able to leave on the weekends. Or, they don’t want to leave their house as a burden for their family to sell after they can no longer handle it on their own.
So, rather than buying, they’re going to choose to rent the house, where they’ll have the flexibility to move around to follow their grandkids. They’ll have the flexibility to move into some sort of senior living facility without having the burden of the house to sell.
Ready to Downsize
With aging comes the need for less space, in general. As baby boomers, their kids have been out of the home for a while, and they have less need for their belongings. It’s time to move on to the next chapter in their lives.
Since boomers require less space, they’ll look to smaller houses as they require less upkeep. Renting provides an excellent option to baby boomers looking to downsize but aren’t quite ready to commit to purchasing a smaller home.
Wanting to Make Other Investments
Baby boomers are notorious for investing, and that’s not a bad thing. Many baby boomers are seeing a lot of money go into the maintenance and repair of the homes they have purchased and are curious as to where that money could be going alternatively.
Baby boomers are interested in investing that money into their retirement fund rather than spending money upkeep on a home that no longer fits their lifestyle. Or, they might be interested in putting that money towards investments that can better benefit their family in the long run.
Cheaper Costs
Not surprisingly, the cost of maintaining a large home is high. Even though baby boomers love a good investment, the costs associated with renovating a house may exceed their current budgets.
Rather than paying for a home that they will have to maintain, baby boomers would instead save money and pay a monthly rent. Included in their rent costs are all the maintenance fees and responsibilities that they aren’t willing to deal with anymore on their own.
Factors Impacting Baby Boomers in Renting vs. Buying
As baby boomers decide to rent vs. buy, there are a few different factors they are considering, including their required social services, where else the money could go, and how long they will live there.
Required Social Services
Many taxes that go into owning a home are associated with social services that baby boomers simply do not need anymore. For example, paying property taxes means you are contributing to public schools.
While it is nice, in theory, to be contributing to your community, baby boomers no longer need to support the public school system in their area. These funds could potentially be better allocated elsewhere.
Where Else the Money Could Go
Although many argue that paying rent is throwing money down the drain, the truth is that this applies as you are building your weather. Baby boomers have been acquiring their wealth for many decades now, so they have a different perspective.
Instead of building their wealth, they should figure out the best way to disperse their accumulated funds thus far.
How Long They are Going to Live There
Baby boomers rentals vs. purchases need to consider the five-year rule just like anyone else. Buying only truly makes sense for people who plan to live in the home for at least five years.
Since baby boomers are enjoying their flexibility, it is no wonder buying is no longer making sense for their lifestyles.
Final Thoughts
As you can see, there are several different reasons baby boomers rentals are becoming increasingly popular. As their wealth has already been built, many baby boomers are now shifting gears as they enter a new phase of their lives. Many are finding that the costs of owning a home no longer make sense for their lifestyles.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.