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Why are more baby boomers who can afford to buy a home renting instead?

Laurin Jacobson, 64, stands in the studio loft of the 2,900-square-foot, three-bedroom South Tampa townhouse that she rents with her husband, Ron. The Jacobsons decided to rent after selling their 5,000-square-foot home.
Laurin Jacobson, 64, stands in the studio loft of the 2,900-square-foot, three-bedroom South Tampa townhouse that she rents with her husband, Ron. The Jacobsons decided to rent after selling their 5,000-square-foot home.
Published Apr. 30, 2016

A few years ago, with the kids grown and gone, Laurin and Ron Jacobson looked around their huge, aging South Tampa house and decided it was time to sell.

"It was an old 1960s home that kept falling apart, and we were going through our money like crazy fixing it up,'' Laurin Jacobson recalled. "We said, 'You know what, we're going back to renting like we did in our teens and early 20s.' ''

Now in their 60s, they're leasing a three-story townhouse with a rooftop terrace and a "great-looking handyman'' who fixes anything that goes wrong.

"It's heaven,'' Jacobson said.

In another part of Tampa, 66-year-old Rose Peters relaxes on the balcony of her apartment as she sips red wine, watches a purple sunset and extols the benefits of renting. Foremost among them:

"If somebody said, 'Hey, Rose, let's go to Timbuktu,' I don't have to deal with a house.''

The United States is increasingly a nation of renters — the share of rental households is at a 20-year high, a recent Harvard study found. Many of today's renters cannot afford a house and have no choice or are in the younger age groups that traditionally make up a major part of the rental population.

But Peters and the Jacobsons represent an increasingly common breed of renter — those in their later years who can afford to own but prefer to rent. People 55 and older now account for 42 percent of the growth in U.S. renter households. One of every three new renter households has enough income to afford a home yet has opted to rent.

"We're seeing in many new apartment communities that a large percentage (of tenants) have been baby boomers who are moving out of a large home or moving away from home ownership,'' said Joseph Beaudoin, a Tampa broker with Cushman & Wakefield, who specializes in multifamily housing. "It's really not surprising — 10 years ago that's all we talked about, the baby boomers, and now that's actually coming to fruition.''

Meanwhile, as boomers join millennials as renters, home ownership has dropped to its lowest level since 1989. It now stands as 63.7 percent, down from 69.1 percent near the peak of the real estate bubble.

A large part of that decline is due to people who lost their homes in the crash. But it also is due to financially comfortable couples like Edward Dyl, a former AT&T executive, and his wife, Laurie, who worked for Merrill Lynch.

Now retired, the Dyls made such a good profit selling their New Jersey home that they paid cash in 2003 for a house in New Port Richey to be near relatives. But with both kids out of college and working elsewhere, they decided they no longer needed a big family home with a pool they did not use and a lawn they were tired of cutting.

"The other thing, in New Port Richey, we were tired of driving every time we wanted to go out to eat. Plus there are not a lot of nice restaurants to have a nice meal with wine,'' said Edward Dyl, 69. They often headed to downtown St. Petersburg and grew smitten with it.

After deciding to sell their house came another hard decision: Buy again or rent? If they bought a condo there would be property taxes, insurance and monthly association fees. If they paid cash, they would no longer have that money to invest.

Moreover, while they had done very well on their northern home, they essentially broke even on the sale of their place in New Port Richey.

"Even though I had a great experience in New Jersey,'' Dyl said, "times have changed, and it's not guaranteed any more that you're going to make money in real estate.''

The Dyls are paying just under $2,500 a month to rent a three-bedroom apartment in the recently built Beacon 430 complex in downtown St. Petersburg. They figure they are earning enough on their investments — including the money they kept by not buying — to essentially live rent-free for now. They also have greater flexibility than if they owned.

"I may not stay in St. Pete for more than five years,'' Dyl says. "We may decide to go out to the West Coast to get out of the heat. We have no hassle of ownership.''

Rose Peters also likes the freedom of renting.

For 20 years, she and her husband lived in a house they owned in San Francisco. Then they divorced, and Peters moved to Tampa in 2001 and rented. Back then, she thought the city had little to offer — " I missed the culture of San Francisco" — so she moved to South Florida and rented there, too, while working for a medical practice.

After being laid off, Peters came back to Tampa five years ago. This time, she found a more bustling city and has been renting ever since. Her most recent apartment is a $1,200 one bedroom with wraparound balcony in the Preserve at Tampa Palms in New Tampa.

"I love it here, to be honest,'' Peters said. "This place is all upgraded, and if there are any issues I just call maintenance.'' And because she's still not sure if she might move again — maybe Philadelphia, where her son lives, or Timbuktu, as she jokes — renting remains her best option.

"I don't want to be tied down,'' she said.

Whether they rent or buy, older people pondering a move need to consider many factors — their lifestyle, their interests, their medical needs, says Kathleen Rehl, 69, a financial planner who is selling her Land O'Lakes home and buying a condo in downtown St. Petersburg. (She is more optimistic than the Dyls that a condo there might be a good investment.)

If buying to be close to grandchildren, people should think about what happens if the kids' parents decide to move. "Maybe you're not sure if your son is going to stay in Chicago or move to San Diego, then what would you do?'' Rehl said. If renting from an individual owner, they need to consider that the owner might sell or sock them with a big rent increase.

That's a dilemma that Laurin and Ron Jacobson could face.

They rent from an investor-owner. They've turned the third floor into a studio for Ron, an emergency room physician who also is a talented artist. Laurin, who teaches children Hebrew through music, grows flowering succulents on the rooftop terrace and frequently hosts wine and cheese parties in a private patio garden on the ground level.

For this, they pay $3,200 a month, up from the initial $3,000. They have a neighbor who is paying $3,500.

"Rent is not cheap,'' Laurin said. "If it keeps going up and up, we might have to buy. But right now we're settled in with renting and loving it.''

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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