Renting vs. Buying Retirement Housing

Are you thinking about moving to a more manageable home and want to continue to live independently?  Health, expenses, accessibility, and location are important aspects to consider.

What are are your options?

The basic answer is that you can either buy another home or you can rent one.  It can be an apartment, a condo, a life lease, or a smaller single family home.  

Lets compare the advantages and disadvantages of renting and buying:

Rental Disadvantages

  • Higher monthly costs
  • Losing equity
  • Your landlord can sell the home and make you move with short notice

Purchase Advantages

  • Lower monthly costs
  • Gaining equity
  • Control on when you move and what you re-sell it for

Renting VS. Buying

Now, lets breakdown renting a 2-bedroom suite vs. owning that same suite:

Monthly Expense ScenarioRentingBuying
Common Fees0$600
Property Taxes0$300
Individual Hydro$100$100
Water (incl. in rent/common fees)00
Individual Heating/Cooling$100$100
Content Insurance$50$50
Building Insurance (incl. in rent/common fees)00
Total Monthly Expenses $2250$1150

We can see, in the chart above, that renting is the most expensive avenue to go down.  You are doubling your monthly expenses when renting and in the end, you get nothing when you move out.

Equity Loss and Equity Gain

Now, lets compare the equity loss and gain with renting vs. owning that same 2-bedroom suite:

ScenarioInvestment AmountProjected Annual % Gain/LossProjected Annual $ Gain/LossProjected
10 year $ Gain/Loss
Purchase Property $400,00010%$40,000$400,000
Rent Property ($2,000/month) $0-6%-$24,000-$240,000
Investing you money in low-risk investments (ie, RRSPs, GICs, TFSAs etc)$400,0004%$16,000$160,000

Low-risk investments can average a $160,000 gain over 10 years but if you are renting, you are also paying your landlord $240,000 over that same time period.  That amounts to a $80,000 net loss in your investment’s equity over 10 years($160,000 minus $240,000 equals -$80,000).

By purchasing in a Freedom 65 Sound Lifestyles community, your equity will see an average increase of 10% each year, which will give you $400,000 in equity gain over 10 years.  

The initial purchase price was $400,000 and you just gained an extra $400,000 over 10 years.  That equals $800,000 in equity that you can do whatever you want with when you decide to sell.

Now, who would say no to $800,000?

If you have the capital to buy now then you should buy so you can gain and save just in case you need to move to a retirement home later on.

Did you know that the average rent in a retirement home is approximately $5,000 to $7,000 per month? That’s approximately $72,000 each year.

Now is the time to make sure you are getting the most out of your investments and the best investment anyone can make is in real estate.

At Sound Lifestyles, we understand that home ownership can be stressful.  This is why we design, build, and maintain fully accessible housing exclusively for retirees.  Our supportive Freedom 65 communities help retirees live independently longer than in a typical single family home.

Contact us to learn more about our supportive living environments and how you can gain on your investments by purchasing in a Freedom 65 Sound Lifestyles community.

We want YOU to keep your independence and your equity!

Still wanting a rental? Sound Lifestyles does have a few rentals. Contact us HERE.