Key takeaways
- According to a study, millions of Americans over the age of 65 choose to rent instead of buy.
- The high costs and responsibilities of homeownership are driving factors for retirees looking to rent.
- Florida, Tennessee and Texas are popular states for retired renters.
- An area’s transportation and healthcare services are top motivations when older adults choose a new hometown.
Gone are the days when our grandparents stayed huddled in the homes where they had raised our parents, snuggled with memories and living out their years in properties that had long been worth it.
According to a recent study, the number of seniors ages 65 and older packing up and moving into rental properties increased by 25%, or 2.4 million. Point2Homes, a real estate listing website for American rental homes, conducted the study based on data from the U.S. Census Bureau, focusing on the 10-year period ending in 2023. The only other age group that saw an increase was the 55-64 age group, which saw about 484,000 more renters during the same time period.
Why do seniors choose to rent?
The number of Americans 65 and older has increased in recent years, which may be a factor in why the number of older renters has also increased. The population over 65 years of age increased 9.4% between 2020 and 2023, reaching 59.2 million, according to data from the Census Bureau.
“While many retirees want to ‘age in place,’ the key is to ‘age in place.’ good “said Jay Zigmont, Ph.D., certified financial planner (CFP) and founder of Childfree Trust. “Renting is a great option for seniors because they can rent in facilities that include housekeeping, concierge, transportation, and more. “I regularly recommend that my older clients rent, if only to pass household responsibilities to someone else.”
There are many expenses associated with home ownership that renters can avoid: homeowner’s insurance, property taxes, and maintenance and repair costs. Many of them cannot be anticipated and are a serious blow to the budgets of older couples. Homeowners insurance rates have increased in some states, particularly in high-risk areas.
Factors Affecting Where Retirees Rent
Some retirees decide to rent in their hometowns, while others pack their bags and transport their lives to another city, county or state. In any case, they usually look for certain comforts and services in their new homes and selected premises.
Realtor.com considers walkability to be of some importance, along with events and facilities worth walking to. These could include senior centers, social clubs, and even gyms and fitness centers. Transportation services should be easily available.
Safety issues also play a role, including the security of the rental facilities, well-lit outdoor areas, and an overall low crime rate. And, of course, quick and efficient access to healthcare is also of considerable importance.
States leading the rental boom
A multitude of locations across the country offer all of these options, some more affordable than others, but many retirees seek them out in southern and Sun Belt states. Florida remains a favorite destination, according to Point2Homes. Seniors make up 21.3% of renters in the Sarasota area, and another 18.5% had settled in nearby Cape Coral/Fort Myers. Jacksonville is also on the list.
“Southern states, especially Florida, Tennessee and Texas, have become favorites because of their lower cost of living, lack of state income taxes and climate,” Zigmont said. “Moving from a high-tax state can mean seniors effectively have 7% to 10% more money to spend, allowing their retirement savings to go further.”
Some other areas have also attracted their proportion of older people. Point2Homes gave Baton Rouge, Louisiana a nod, and found that Omaha, Nebraska, and two Texas cities, Dallas and Austin, more than doubled their number of retirees renting over the 10-year period.
Another study also based on Census Bureau data named popular destinations for retired renters, including Massachusetts and Minnesota. Six of the top 10 locations on Hire a Helper’s list were Sun Belt states.
The conclusion
If you’re retired and looking to move, renting may be the way to go. Consider southern and Sun Belt states, such as Florida, Tennessee, and Texas, where you may also find other renters 65 and older. Renting is also a good option if you want to avoid yard work and home maintenance, plus home insurance costs, which may also be rising in some of these popular locations. Consider your budget, weigh the pros and cons of each destination, and know that if you decide to rent later in life, you’re not alone.
