If you\u2019re about to retire, you\u2019ve probably also thought about selling your family home so you can spend less time on maintenance and more on your hobbies, keeping fit, travelling or simply relaxing.<\/p>\n
But then what? Should you rent or buy again? And if you buy, what type of home should it be?<\/p>\n
Gerhard Kotz\u00e9, MD of the RealNet estate agency group, said the advantages of renting \u2013 especially if you choose an apartment or sectional title townhouse – are that you will have less responsibility for home maintenance, most likely better security than in your house, more freedom to lock-up-and-go when you like, and none of the costs associated with home buying and ownership, such as transfer duty and bond registration costs, insurance and rates and taxes.<\/p>\n
\u201cRenting for a while is probably also a good idea if you are still undecided about where you want to settle in retirement \u2013 which could be your own familiar area, or closer to your children, or in a favourite holiday destination.\u201d<\/p>\n
However, he said, there are also disadvantages in renting \u2013 the most significant being the uncertainty about how much rentals might rise in future, and how you would continue to make these monthly payments, especially if you\u2019re on a fixed income that is being steadily eroded by inflation.<\/p>\n
\u201cIf you have children, you may also worry that renting is just eating up their inheritance.\u201d<\/p>\n
So, said Kotz\u00e9, the best option for many new retirees is to buy a sectional title unit in a secure complex, \u201cespecially if you can use the proceeds of your home sale and buy the unit outright.<\/p>\n
\u201cIn such complexes, there is of course a monthly levy to pay, but\u00a0 gives you much the same freedom from maintenance chores as renting would \u2013 and you have an appreciating asset to show for your trouble.\u201d<\/p>\n
Looking ahead, however, you may wish to combine your decision about where to live with planning for possible health-care needs in the future, in which case you should be looking to buy an apartment or cottage in a retirement village with its own assisted-living and frailcare facilities, he said.<\/p>\n
\u201cHere you will also be paying a monthly levy, but the trade-off will not only be lower home and garden maintenance but peace of mind about what will happen to you if you become ill or too frail to manage your own home.<\/p>\n
\u201cMany retirement complexes also have a levy stabilisation fund to help keep a lid on future increases – and when you make this choice you will again have an asset to leave to your heirs.\u201d<\/p>\n