Knowing when it is time to downsize to a smaller home can be tricky and difficult. Not only is your current home the place where you have made a lot of memories, but letting go of it is a difficult process for many. There are many reasons as to why a couple, family, or single individual will want to downsize, some of which will involve costs and others due to external factors. If you have been wondering whether it is the right time to downsize, here are some scenarios to look out for and how to make the process as smooth as possible.
1. The Maintenance Costs Are High
Bigger homes are expensive to maintain, not only in property taxes but in the utility costs to upkeep it. If you are planning on retiring soon, or want your money to go farther, then look at your maintenance costs. If they are high, consider downsizing.
2. The Kids Have Moved Out (Empty Nest)
One of the most common reasons for having a larger home is to fit a growing family but when the kids move out, these rooms sit empty. This means that they will be heated, cooled, and cleaned without being used, which ends up being a waste. If you cannot find use for these rooms (like renting them out), then you may want to downsize.
3.You Have a Lot of Equity Built Up
If your home has been completely paid off and you have built up a lot of equity, you may be able to sell your home for quite an expensive sum. Of course this depends on the appreciated value of the home, the market, and where you are located, but your home may be worth a lot more than you think. If this is the case, you could sell the home, buy a smaller one and have a lot of money left over. Similarly, if you live in an excellent neighborhood or in a good school district, you’re going to get more out of selling the home.
4. You Are Retired/Retiring
This is one of the main reasons that people downsize to a smaller home. Someone who is retiring soon or is retired may want to cut back on expenses like insurance, mortgage payments and property taxes. By downsizing, you cut these down drastically and have more to save for retirement.
You Want to See the World
By downsizing your home, you will have a lot more money freed up to travel. This means you can travel care-free, choose to buy a maintenance-free property for winter months, or see that country you’ve always dreamed about.
Tips for Making Downsizing a Smooth Process
If you have decided to go through the process of downsizing your home, there are several steps you can take to ensure that it is a smooth process.
- Take a look at your current needs. Figure out whether you will need that pantry, have that formal dining room, or need that second bedroom.
- Take out the tape measure and get to work. Find out how much space you are actually using versus how much space you have now. This will give you a general idea of how much space you should be downsizing to.
- Sell off the items that you will not be taking with you. This includes any oversized furniture that isn’t going to fit into your smaller home.
- Always figure out how much storage space you will need after the move. Unfortunately, it’s very easy to overestimate and underestimate how much space you need based on what you are bringing along.
- Make a moving checklist!
- Determine what your lifestyle needs will be going forward. This will help you determine whether you will need a condo, a townhome, or a small apartment/house.
- Start decluttering your home early! Donate and sell items that you won’t be bringing along and if you have adult children, either get them to help you sort through the keepsakes or give them some that have piled up.
- Do low-cost upgrades on the home if the home looks and feels outdated. This process is required if you are going to stage your home before the eventual sale.
Figure out what items you will need to replace.
Although downsizing your home will be an emotional and difficult event, it doesn’t have to be a horrible experience. In so long as you stay positive and upbeat about the process, you will be able to make the experience go that much smoother.
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