Should You Buy Or Rent A Condo As Expat Retirees?

Most people decide to buy a house once they retire, but you might be happy to know that sometimes there is a better alternative such as renting a property. Especially if you are thinking long-term and you are comparing various factors, it can be more cost-efficient to rent a particular property instead of buying a brand new one in a certain neighbourhood. Let's explore a couple of aspects and decide whether renting or buying is better for retirees.

Consider the long-term value of the house before buying it

Real estate markets are almost never stable and even if they are, this happens only for a short amount of time. Therefore, the property you are buying today might not have the same value tomorrow or in a couple of years and you are basically losing money in the long run. This is one good reason for considering renting a property instead of buying it.

Make use of the price-to-rent ratio

This is a very good trick if you want to find out if the value of the property you want to buy will eventually drop in the future. All that you have to do is to divide the current price of a house by the cost of renting it for a year. If the resulting number is 20 or higher then that particular property will eventually lose some of its value in the future. On the other hand, 15 or an even lower number is considered ok and it indicates that your future property might not have a substantial drop in value in the upcoming years.

Renting is very popular, mainly in urban areas

If you like the vibe of a big city, it is a good idea to rent a condo in an urban area rather than buying a brand new house somewhere else. First of all, you have the advantage of spending less money on your rented property and secondly, you are closer to everything a big city provides you with such as restaurants, beauty salons, spas, parks, recreational places, coffee shops, grocery stores, supermarkets, etc.

Owning is more appealing if you are building equity

Obviously, you shouldn’t completely set apart the idea of buying a house once you get retired because if you find a very attractive and well-maintained one, you can build equity over time and also have a comfortable stay. Additionally, this property will be inherited by your children, so you are basically offering them a very valuable and precious gift as well!