Here are five things to keep in mind before you decide to downsize. As always, the Tucker Team is here as your advisor to guide you to the right decision based on your needs.
Think Finances First
You need to carefully consider these fees because moving into a smaller home doesn’t automatically mean you’ll be saving money. While expenses like utilities and maintenance are relatively cheaper when you downsize, you can also potentially have higher costs of living depending on where you will relocate. Not to mention the additional costs of moving and furnishing your new home. Those household costs can be a huge and significant factor when considering whether downsizing is a better option.
Can You Afford to Sell Your Home?
If you’ve owned your home for many years, you probably gained a lot of equity. This means selling your home could provide you a comfortable nest egg to put towards a smaller, cheaper home while still leaving some money to add to your savings and other future investments. But the difficult scenario is if you sell the home and the amount you receive is less than what you owe on the mortgage. When this happens, you will have to use your own money to make up the difference or risk a short sale. In other words, if you are in a negative equity position towards your home, you might have to put off your plans of downsizing for now and stick to your current house.
How Much Space Do You Need In The New Home?
If your current home provides an ample amount of space needed for your work, hobbies, and completely accommodates the needs of your family, plus the fact that you can afford to stay and maintain it, then downsizing may still be a far-off idea for you.
But if, for example, you’re starting a new chapter of your life where your kids are already older and started moving out, you might not require all of the extra bedrooms. Besides, heating and maintaining the extra rooms can be costly.
Moreover, think about your outdoor space. If creating a relaxing outdoor retreat or having a lush garden is important to you, it may be difficult to give up. But if maintaining your yard just feels like work, then you might consider moving to a condo or a low-maintenance property. Likewise, don’t forget to evaluate other things such as parking or garage space when you move, especially if you have two vehicles.
When thinking about the pros and cons of downsizing, also note that an optimal floor plan is critical to maximizing space. There are many smaller houses with a significantly better floor plan, which could be the key to your happiness if you think moving is the right choice for you.
How to Get Rid of All Your Extra Stuff
Start by taking into account all of your stuff. If you are adamant about keeping most of it, you may want to consider moving later. Or you can opt to rent out storage space until you can figure out what treasures you want to keep, donate, and even sell. If you think sorting through your belongings can be a nightmare, some businesses can help you with the job. But if you find that going through your old stuff is liberating and it would feel great to dispose of the many things you’re holding onto for no reason, be prepared to come up with a plan so you can properly work out what you can and can’t take with you to your new home.
Have A Heart-to-Heart Discussion
If the thought of moving into a smaller home makes you excited because you’ll have extra time relaxing on the patio with your favorite book or drink, instead of cleaning bedrooms you rarely use or maintaining your outdoor space, then you are probably ready to downsize.
While moving into a smaller house has clear advantages, you’ll only realize how small it really is once you start looking, and you may find yourself comparing your potential home to what you’ve grown accustomed to. This is why it’s also helpful to create a list of pros and cons and make sure to carefully evaluate your family’s needs and future plans before you decide.