Thinking About Downsizing? Some things to Consider.
Should you downsize? Only you can make that decision.
Your youngest left for school a few years ago. Now it’s just you and your mate. The house seems much bigger now. The empty bedrooms and continual maintenance have you wondering if it’s time to consider downsizing.
Downsizing is an important decision that will affect your finances and quality of life for years.
Those who advocate for downsizing often point to five benefits.
Downsizing reduces expenses. The most important reason most people choose to downsize is to reduce their monthly expenses. Housing is the largest expense for most people. It’s not uncommon for someone downsizing to reduce their housing expense by 20% or more. That can make a big difference if you’re living on a retirement income. Best time to Downsize is when it’s a Seller’s Market. We can’t predict the future but as of now 2017 in San Diego it is still a Seller’s Market.
Downsizing lowers utility bills. A smaller home generally means lower utility bills. No need to heat or cool bedrooms or space that you’re no longer not using.
Downsizing lowers property taxes. Unless you move to a fancier neighborhood, your home will be worth less and that means lower property taxes.
Downsizing means less maintenance. Whether it’s cutting the grass or vacuuming the floors, less square footage means less work and more free time.
Downsizing frees up capital. If your home is paid for you’ll end up with money that can be invested. Or if you have a mortgage, your mortgage payments will be reduced.
If you do decide that you want to downsize, you’ll face 3 decisions.
Condo or single family home? They each have their advantages and disadvantages. Owning a condo means no grass to cut or snow to shovel. You can lock the door and leave for months. But you do have neighbors who can be nosy or noisy and you also need to consider the monthly maintenance fees.
On the other hand, a single family home means more work, but more freedom, too. Probably a little more space as well.
Buy or rent? There was a time in your life when owning your own home made a lot of sense. But maybe that time has passed. Calling a landlord instead of a repairman can be nice when the fridge doesn’t work. Then again, having the freedom to make changes to your home could make the extra work worthwhile.
Move or stay in your current hometown? Do you want to stay in familiar surroundings with lifelong friends and family? Or would you rather move to be nearer your grandkids or live in a warmer weather climate? The choice is yours.
Once the major downsizing decisions are made, you’ll still have a few questions to ask yourself and a few facts to think about.
Consider what your retired lifestyle will be like. Will you do a lot of entertaining? Need work space for a hobby? Do either you or your spouse need a space to be alone periodically?
It seems obvious, but you’ll need to realize that rooms will be smaller in your new home. You might find it helpful to measure rooms in a condo or smaller single-family home. Using room configuration software try laying out some of your furniture in those rooms. You’ll probably find that some furniture shouldn’t make the move with you.
At this point you’ll have a feel for the magnitude of the job. Expect to spend between 3 and 6 months prior to your move getting rid of things that won’t be in your new home.
Deciding what stuff must go can be difficult. Collectibles, family memories, important papers all will need your attention.
Items that bring back memories or are family treasures can be the hardest decisions. You may find that a picture is sufficient to keep the memory alive. Or that it’s time to pass some items down to the next generation.
When possible, don’t throw things in the trash. Try to find them a new home. Family, friends and even freecycle can provide a better answer for things you need to leave behind.
Go through each closet and room. One at a time. Some people find it helpful to have a schedule so as not to become overwhelmed by the task. Like most big projects, getting ready to downsize is easier if you break it into manageable chunks.
By Gary Foreman