June 9, 2020
7 MINUTE READ
There are a number of reasons that you may be considering downsizing your home. Sometimes, the “less is more” mindset is all it takes to convince homeowners that they should trade in their house for smaller quarters.
However, when asked why they might consider purchasing a smaller home, nearly 70 percent of homeowners who have downsized in the past said that saving money was the primary motivating factor in their decision.
Of course, everyone’s reasons for downsizing can differ. The right reason for you may be different for your neighbor — and vice versa. But while we undoubtedly live in a society that has been continuously telling us that bigger is better, it can be beneficial to take a step back and shift your thinking to consider whether a smaller home would actually better serve your lifestyle and goals.
If you have recently made the decision to downsize and move into a smaller home, you are probably wondering what happens next. Downsizing is a trend that is most associated with retirees and empty nesters — and certainly for a good reason — but downsizing isn’t only for retirees, nor is it a one size fits all solution for people whose kids have left the next.
Because everyone’s situation is so unique, it is important to weigh all of your options and give them consideration, taking in mind how it will affect your finances and more. Here are some tips for downsizing that can help you get started in your journey.
Of course, saving money isn’t the only reason to downsize your home — but it is a good one. After all, downsizing will likely lower your mortgage payment, or it may even eliminate the need for a mortgage payment altogether. If your proceeds from selling your home are more than the cost of the smaller home, you could even pay for the home with cash and skip a mortgage loan completely. Even if you do need to take out a mortgage loan, chances are it will be less than what you are paying for your home now. Keep in mind that if it isn’t, then downsizing may not make financial sense for you.
Another financial advantage of downsizing is that your utility bills will likely be less each month. Not only is a smaller home more efficient for utilities such as heat, air conditioning and electricity, newer homes also have energy-efficient features that are not only good for your budget, but good for the environment, as well.
Downsizing your home will almost certainly save you money each month, but it’s what you do with those savings that will really have the biggest impact on your budget. For instance, consider investing the money you save each month and over time, you will see your money grow. A few key strategic investment moves now can help set up financial security for your family and future generations.
Many people, especially empty nesters, realize that they can save money and improve their quality of life by downsizing. Even so, that doesn’t mean that it’s always clear which type of home or living arrangement is best for you. Fortunately, there are many options for you to choose from. Retirement communities or assisted living can be popular options for those who are looking to downsize and plan the next phase of their life — but these options aren’t always right for everyone.
If a retirement community doesn’t fit your needs, U.S. News & World Report has long touted the benefits of condo living, including a relatively low cost point, less yard work and maintenance, and a greater sense of community. Of course, a single-family home is also an option, where you’ll enjoy more freedom and personal space, and can build equity.
Before making any decisions, it’s important to consider many factors, including the costs of independent living and paying a traditional mortgage loan. A mortgage calculator can help you in determining what your potential costs may be.
It sometimes seems to come as a surprise, but downsizing your home also requires significant downsizing of your possessions, as well. Unfortunately, if you don’t put a plan in place to tackle the downsizing, it can be a stressful experience. Your plan for decluttering and downsizing should include everything from the items you definitely want to keep to who will help you with the physical aspects of packing and moving.
Keep in mind that many people report feeling incredibly emotional about living their old lives and possessions behind, especially at first. However, once it is done and you are all settled in at your new home, it will feel good to have a fresh start with less clutter. In fact, decluttering has been reported to be a great way to help ward off anxiety.
Moving from any home, especially your established family home, is a tremendous change for anyone — but that certainly does not mean that it can’t be a positive and rewarding experience. Make a point to think of this as an opportunity to build a new life, full of what is important to you. If you go into the move with the right expectations and mindset, along with a solid plan and our tips for downsizing, there’s no reason you can’t use this move to help craft your ideal life.
If you are wondering whether or not to downsize, you should keep in mind that there are a number of potential advantages to downsizing, including the following:
If you’re ready to find out more about downsizing or want to search nearby houses to buy, we’re here to help. At Reali, we offer superior service and local agents, combined with the latest in technology. Find an agent or contact us when you’re ready to get started!