NCOA National Council on Aging

Help With Decision Making

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Should I buy or rent?

Use this calculator from Ginnie Mae to compare the savings and other considerations of owning versus renting a home.

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Key Questions to Consider

What are the advantages of renting?

For many, freedom from property maintenance is one of the top reasons to rent instead of own a home. If you dream of living in a different part of the country or owning a house on the beach, renting can help you find out if this new living situation works for you. If it turns out that your dream location is more of a nightmare, it is easy to move on at the end of your lease term.

When does it pay to rent?

Renting can be a smart strategy in areas where home values are falling or where home prices are relatively high and rents are relatively low. Check the New York Times interactive calculator to compare the costs of buying versus renting a home in different situations. If you rent, you also may have access to amenities such as a pool that you may not be able to afford if you buy a house.

If your FICO score is below 620, you will have a hard time qualifying for a low interest rate on your mortgage, which will make owing a home more expensive over time. Renting also relieves you of the cost and trouble of keeping up with home repairs, maintenance, and yard work.

What factors should I consider in making a decision about selling my home and renting?

Check home sale prices in your neighborhood to decide if you can sell your home at a price that will allow you to afford a long-term lease on a rental unit. This means you have to look into the rental rates for the type of rental unit you would consider moving to after selling your house.

To learn more about factors you might consider in making this decision, read the Kiplinger report, Should You Buy or Rent?

What are some affordable housing options?

The U.S. Department of Housing and Urban Development (HUD) provides housing assistance to seniors with limited incomes. HUD offers a limited number of federally subsidized housing units, some of which are designated for seniors, through the Office of Public and Indian Housing. HUD also offers a housing choice voucher program (also termed Section 8 programs) through which you can rent privately owned housing, including single-family homes, townhouses, and apartments.

The Section 202 Supportive Housing for the Elderly program provides affordable housing for older people who want to rent an apartment in a senior housing community. Frail and impaired seniors who live in HUD-subsidized buildings may also be able to receive services that can help them to age in place, such as housekeeping, wellness programs, home-delivered meals, and transportation services.

To be eligible for these programs, at least one household member must be over age 62. Your income cannot be greater than 50% of the median income for the county or metropolitan area where you want to live. These programs are limited to U.S. citizens and specified categories of non-citizens who have eligible immigration status. Learn more about these housing programs in your area, how to apply, and eligibility requirements at the HUD Rental Assistance web page.

The U.S. Department of Agriculture offers a variety of loan programs, grants, and subsidies to help seniors and other families who live in rural areas obtain affordable housing.

What is a NORC and how can it help me to age in place?

A naturally occurring retirement community (NORC) is an apartment building, housing complex, or neighborhood that has a large concentration of residents who are age 60 or older. Though not originally designed for seniors, the NORCs evolve over time as the residents grow older.

Due to the high concentration of seniors, some communities have developed NORC programs to provide services such as case management, wellness programs, social activities, and transportation. These help residents to stay active and independent.

Visit the NORC Aging in Place Initiative to learn more about this concept and find communities that offer NORC programs.

Are there services to help me find a place to rent?

Many real estate agents specialize in senior rentals. Commercial sites like the Apartment Guide include a list of senior apartments for rent that you can search for units and communities in different states.

Online listings help make the search less stressful. These sources often provide links to larger apartment complexes with websites that show pictures and floor plans of their units. Be careful in using online services because there have been many apartment rental scams using websites.

Cost Concerns

How much can I afford to pay in rent?

Federal guidelines advise that you spend no more than 30% of your income on rent. You should review your budget to calculate a maximum rent level that you can afford based on your income and expenses. Your estimated maximum should be used as a rent ceiling that you use to search for an apartment.

What other costs should I be aware of when comparing rentals?

While many states limit the security deposit that landlords can charge, prospective renters are often surprised by the size of the security deposit needed to rent a dwelling. Some landlords also charge extra for pets.

Utility costs can be an extra financial burden if the landlord does not pay for gas, electricity, water, trash, or cable services. Find out what you can expect to pay in the colder and warmer months when you are comparing rental units.

The Apartment Hunting Guide provides a checklist of what to look for and ask when apartment hunting.

How can I calculate the cost of renting versus owning?

Check Ginnie Mae’s Your Path to Homeownership – Buying vs. Renting for a calculator that you can use to analyze the cost of renting versus owning.

Are there tax consequences in selling my home and moving to an apartment?

A homeowner needs to report the sale of a principal residence as a part of an IRS tax filing if a gain is realized on the sale of the home. Check IRS Publication 523, Selling Your Home, to get the details. Discuss your plans with your accountant for advice on the tax consequences of selling your home.

How can I find an affordable apartment?

Apartments are labeled as "affordable" if the renter does not have to pay more than 30 percent of their monthly income for rent and utilities. If you are over age 62 and your income is limited, you may qualify for a unit in an affordable senior housing community through the HUD Section 202 program.

Visit the HUD Low-Rent Apartment Search website to find a community in your area.Because of high demand, there are waiting lists for these rental units in almost all areas. Be sure to ask if a community has apartments available, and if not, how long you can expect to be on the waiting list.

You can also contact city or county housing agencies, as well as senior centers and Area Agencies on Aging to identify other local housing options. Some fraternal or religious organization also sponsor affordable housing programs that are usually restricted to their members.

Is rental assistance available for veterans?

Homeless veterans may be able to get rental assistance through HUD and the Department of Veterans Affairs program called HUD-VASH. Qualifying veterans receive a voucher they can use to choose their own housing. HUD-VASH targets veterans with serious mental illness and other disabilities who participate in case management and rehabilitative services as part of the program.

The National Call Center for Homeless Veterans at 877-4AID VET (877-424-3838) provides information on other VA services, programs, and other community resources.

Veterans, service members, their families, and caregivers can check eBenefits for other housing programs.

Consumer Cautions

Should I be concerned about scams in looking for an apartment?

There have been many apartment rental scams reported by individuals using rental websites. Phony listings are common bait and switch schemes. Be wary of postings that offer low rates in an expensive area, or an email that asks that you to wire money in exchange for the apartment key. Consider working with a local real estate agent or rental agency.

Check out the landlord carefully before handing over your rent and security deposit money. Ask to see his or her identification and write down the information. Some con artists will try to rent out someone else’s apartment and may even give out a fake key. Others will use the listing to set up a robbery. Be wary of these possibilities and take a friend or family member when you go to look at a potential rental unit.

What should I check in a lease or rental agreement?

Get a copy of the paperwork in advance. Carefully review the terms and conditions, including the amount of rent, the amount of the security deposit and when you can get it back, payment date, and late fees. If you are renting a condominium, review any special assessments that you may be charged for repairs or improvements to the property.

Make sure that all the blanks are filled in before you sign the contract. Look at restrictions on guests, number of residents, pets, home modifications, or running a home business. Be wary of provisions that allow for automatic rate increases or give the landlord unrestricted access to the unit. If you are promised repairs or replacements, be sure that these are included in your written agreement.

An attorney can check the lease for discrepancies and explain anything you do not fully understand. You can protect your security deposit by carefully recording or taking pictures of the condition of the unit when you move in.

What rights do I have as a renter?

Under the Fair Housing Act, landlords cannot discriminate against you based on race, sex, religion, country of origin, color, or disability. Learn about the Fair Housing Act at the HUD website.

Your landlord must provide you with a safe and clean place to live. Your lease or rental agreement may cover some of your rights. However, most of these contracts are designed to protect the landlord more than the tenant.

Get a copy of the Tenant’s Rights Handbook for your state from either the Department of Real Estate or Department of Consumer Affairs. Some states may provide extra protections for older renters, such as limiting rate increases or evictions.

Where can I go to get advice about rental issues?

The U.S. Department of Housing and Urban Development (HUD) provides consumer information about renting an apartment and HUD rental assistance programs. Check HUD.gov for information about federal and state housing programs. You also may be able to get free advice on rental issues from a HUD-approved housing counselor.

Do I have to move if my landlord is in foreclosure?

If your landlord is being foreclosed, you have rights under the federal law called the Protecting Tenants at Foreclosure Act. You do not need to move, and you should keep paying your rent on time.

If you have a written lease, you have the right to stay until the end of the lease. If your written lease has ended or if you have a month-to-month lease, the new owner has to give you at least 90 days notice before starting an eviction against you.

What if I am evicted?

In an eviction, your landlord takes you to court to make you leave your apartment. If you receive a written notice of eviction because you did not pay your rent on time, contact your landlord and see if you can arrange a payment schedule. If you are facing financial problems, use the NCOA BenefitsCheckUp to check whether you might qualify for public benefits that can lower your monthly costs.

Contact a lawyer or legal services for help if you paid your rent on time or have other disputes. The American Bar Association describes free legal services and lists the legal hotline number for each state. Check with your local Area Agency on Aging to see if you can get help if you are ordered to move because the property is not safe.

How long do I have to wait to get public rental assistance?

There are a limited number of subsidized housing units and vouchers available for seniors and other low-income families through HUD and local public housing authorities (PHAs). As a result, there are often long waiting lists.

Your local PHA may close its waiting list when it has more families on the list than it can assist in the near future. It may also give preference to certain types of families, such as those who are homeless or spend more than 50% of their income on rent. Contact your local PHA to learn about waiting times in your community.

How can I protect my home equity if I sell my house and rent?

Whatever the size of the sum you get when you sell your house, consider working with a trusted financial advisor to invest the funds wisely. Make sure that you ask questions about the advisor’s licenses, certifications, and experience with Medicare and Medicaid, along with the services you will get and how much these will cost. Interview several candidates and ask for references from their current clients.

The Financial Planning Association offers more tips and guidelines.

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