Would you consider renting for life? That may well be your tenant’s expectation.
Historically, the most common path to a comfortable retirement had three key steps: buy a house, pay it off before retiring, and save hard for as long as possible so you have a decent nest egg.
These days there are many who are finding it hard to make that first step and get on the property ladder, often because of house prices that are way out of reach.
In Australia and New Zealand, it’s a safe bet that home ownership remains strongest among the over-65-year-olds.
In an Australian survey conducted through finder.com.au, 47 per cent of respondents, who were renters, said they would consider renting for life. New Zealand 2013 Census figures have home ownership among those in their 30s dropping to just over 40 per cent between 2001 and 2013.
Many see the cost of buying – interest, rates and maintenance on top of a mortgage – as being much more than paying rent. Their focus is on saving, or investing, rather than buying a home to live in.
There are many reasons why someone may choose to rent rather than buy.
Renting can offer flexibility.
A tenant’s career path might necessitate frequent changes in location, or their profession may require significant travel making short term rental accommodation more suitable.
Not being locked in to a long-term loan allows people the freedom to structure finances differently.
If we accept that renting for life – either by choice or necessity – is likely to increase, the rental market will need to reflect that.
One thing that is certain is that people will seek greater security of tenancy.
There has always been fluidity in property management – as tenants come and go – but if the trend is to longer term rental, the trust you have in your property manager to ensure the right tenants will become even more crucial.
And what this also means for property owners, property managers and renters is that mutually respectful relationships will become increasingly important for all parties moving into the future.