The New Rules of Renting in Retirement

Owning a home has long been a major goal for many Americans. But nowadays, more retirees are swapping home ownership with renting.

Between 2013 and 2023, the number of renters aged 65 and older grew by nearly 30%, according to an analysis of U.S. Census Bureau data by Point2Homes. Renting instead of owning typically means saving on repairs, property taxes and the burden of maintaining a home — potentially one that’s too big for you as an empty nester. Some people sell their homes when they retire, find a smaller rental unit and invest the money from the home sale for future goals, or use it to travel and invest in hobbies.

Renting is no longer just a backup plan

Some people rent by necessity, but many retirees are considering renting even if they own homes. Downsizing often makes more sense when parents become empty nesters, and they aren’t receiving steady wages anymore. Renting also avoids homeownership headaches like repairs and maintenance. The landlord can do those things for you, and selling your home can provide more financial flexibility.

The extra space in your budget can build your savings, which become extra important if you face a surprise cost, such as a health scare. Roughly one-third of seniors were cost burdened in 2023, according to a report by Harvard University’s Joint Center for Housing Studies. That means they put more than 30% of their income toward housing costs, which leaves little room for error when it comes to other expenses. Renting can help with many of those problems, especially for retirees who downsize.

The new priority is stability, not just lower rent

Renting can provide stability, but it’s important to assess how long you will stay put before committing to a lease. Some rental units only make sense for a short amount of time before you’re looking for a new one, and if rent hikes go up too much, you may have to find another location.

While you shouldn’t cram yourself into the cheapest apartment you find, it’s optimal to pick a unit that comfortably fits your budget and offers mobility. Having the bathroom, kitchen and bedroom on the same floor may become more valuable to you as you get older. Elevators, walk-in showers and nearby health care facilities can also become more important as you move deeper into your retirement.

Reading the fine print also matters. A lease should outline how to renew, what you can expect from potential rent hikes and address other important details. You should also research local tenant protections to know how to defend yourself in case your landlord tries to overstep their boundaries.

Know the help that exists before there’s a crisis

If you are feeling financially strained by a rental unit, it’s good to know about the programs that can offer assistance. The Housing Choice Vouchers, public housing and Department of Housing and Urban Development’s Section 202 supportive housing are viable federal programs for older adults who need some assistance. The HUD has an additional hub that lists various rental assistance programs that can provide the funding you need.

Federal programs are a good starting point, but you can also filter your search to state and local options.

Watch out for scams. Some scammers target older renters with fake listings, pressure them to send deposits quickly and promise guaranteed assistance. If it sounds too good to be true, it probably is.