Key Takeaways
- Millions of Americans ages 65 and older are opting to rent instead of buy, according to a study.
- High costs and responsibilities of homeownership are the driving factors for retirees looking to rent.
- Florida, Tennessee, and Texas are popular states for retiree renters.
- An area’s transportation and healthcare services are primary motivations when older adults select a new hometown.
Gone are the days when our grandparents remained nestled in the homes where they had raised our parents, snuggled in with memories and living out their years in properties long paid off.
The number of seniors age 65 and older who packed up and moved into rental properties increased by 25%, or 2.4 million, according to a recent study. 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 to see an increase was the 55-to-64 age group, which saw about 484,000 more renters during the same period of time.
Why Are Seniors Choosing to Rent?
The number of Americans age 65 and older has increased in recent years, which may be a factor as to why the number of older renters has also increased. The age-65-plus population rose by 9.4% from 2020 to 2023, reaching 59.2 million, according to Census Bureau data.
“While many retirees want to ‘age in place,’ the key is to ‘age in the right place,’” said Jay Zigmont, Ph.D., certified financial planner (CFP), and founder of Childfree Trust. “Renting is an excellent option for seniors because they can rent at facilities that include housekeeping, concierge, transportation, and more. I regularly recommend that my senior clients rent, if for no other reason than to pass household responsibilities to someone else.”
There are a lot of expenses associated with homeownership that renters get to dodge: homeowners’ insurance, property taxes, and the costs of maintenance and repairs. Many of these cannot be anticipated and deal a serious blow to elderly couples’ budgets. Homeowners’ insurance rates have been increasing in some states, particularly in high-risk areas.
Factors Impacting Where Retirees Rent
Some retirees decide to rent in their hometowns, while others pack up and transport their lives to another city, county, or state. In any case, they’re typically looking for certain amenities and services in their selected new homes and locales.
Realtor.com tags walkability as being of some importance, along with events and facilities worth walking to. These might include senior centers, social clubs, and even gyms and fitness centers. Transportation services should be easily available.
Safety issues, including the security of the premises they’re renting, well-lit outdoor areas, and an overall low crime rate, factor in as well. And, of course, prompt and efficient access to healthcare is also of considerable importance.
States Leading the Rental Boom
A multitude of locations across the country offer all these options, some more affordably than others, but a lot of retirees are looking for them in Southern and Sun Belt states. Florida is still a favorite destination, according to Point2Homes. Seniors account for 21.3% of renters in the Sarasota area, and another 18.5% had nestled down in the Cape Coral/Fort Myers vicinity. Jacksonville made the list as well.
“Southern states, especially Florida, Tennessee, and Texas, have become favorites due to their lower cost of living, no state income tax, and weather,” Zigmont said. “Moving from a high-tax state can mean that seniors effectively have 7% to 10% more money to spend, which allows their retirement savings to go further.”
Some other areas have drawn their share of seniors as well. Point2Homes gave Baton Rouge, Louisiana, a nod, and it found that Omaha, Nebraska, and two Texas cities—Dallas and Austin—more than doubled their numbers of renting retirees during 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 Bottom Line
If you’re retired and looking to move, renting may be the way to go. Consider Southern and Sun Belt states like Florida, Tennessee, and Texas, where you may find several other 65+ renters, too. Renting is also a good option if you want to skip the yard work and upkeep to a house, plus home insurance costs which may be rising in some of these popular locations, too. Consider your budget, weigh the pros and cons of each destination, and know that if you choose to rent later in life, you’re not alone.
