Seniors and housing: downsizing in today’s rental market
More and more, baby boomers are entering the rental housing market
It’s no secret that millions of baby boomers are at or nearing retirement, and many are downsizing out of homes to rental units. Both the number and percentage of renters aged 50 and over increased by at least 50 percent from 2005 to 2015 according to a study by Harvard University. What does that mean for seniors entering rental market? Fewer options.
As the rental market struggles to catch up with demand, seniors must be prepared before they begin the search for their next abode. Being ready to move from a house to an apartment or smaller residence will take careful planning.
Here are some tips to help with the process:
- Decide how much rent is affordable. Chances are very high that our income will decrease upon retirement so it’s important to consider affordability not just now, but also in the future. Consider not only your income but the type of lifestyle you plan to enjoy and the costs associated with that.
- How long will you live in this rental? Is this just a stepping stone move or a permanent move? If this is intended to be for a short time, then cost and location considerations are different than if it’s a long term rental. It may be that this next move is downsizing without retiring and income levels won’t be changing. That changes the affordability factor.
- Location, location, location. Where do you want to live and are there affordable rentals in that area? Look at online websites like www.michiganhousinglocator.com or www.hud.gov/local for available housing in your chosen area. If you’re staying in the same general area, drive around and look at different neighborhoods to see what is available.
- Check your credit! There’s a very strong chance that the landlord will require a credit check before leasing a place to you. The best way to check your credit for free is www.annualcreditreport.com. While it’s always a good idea to be aware of what is being reported on your credit report, it’s especially critical when looking for new housing. And when there aren’t enough rentals to meet demand, prospective landlords can afford to be selective when choosing new tenants. Having a good credit score will help when looking at renting a new home.
- Complete the process. This last step includes completing a rental application, paying a fee for a background check, providing proper identification and references. If you’re newly returning to the rental procedures, these steps may have changed but they are pretty standard in today’s market.
As you prepare to enter the rental market, keep in mind that the current rental market is very competitive as lingering effects of the Great Recession and subsequent housing crisis have left more households renting than at any time in the past 50 years. This means that there aren’t as many rentals as there are prospective renters. Taking the steps outlined above will help ensure that once the right place is located, you will be ready to act on moving to your next home.
Michigan State University Extension offers financial literacy and homeownership workshops throughout the year to help you become financially healthy. For more information of classes in your area, go to either http://msue.anr.msu.edu/events or www.mimoneyhealth.org. Additionally, you can take the Financial Health Survey at MI Money Health to access if you’re financially healthy and discover more ways you can improve your financial health.
Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at MIMoneyHealth.org.