That home you’ve had for so many years could be filled with treasured memories: it may be the place where you raised your kids, the neighbourhood where you found friends for life, or the house in which started a new business that changed your life. In any case, letting go can be hard sometimes. But if you’re going into your retirement, you might be wondering, Is this house too big? Are the maintenance expenses too high? Will I feel better in a smaller place?
Before making the big decision of downsizing, these are the advantages and disadvantages:
Make some extra money
We’ve all seen how much housing prices have risen in many areas of Australia, so, if you downsize your home, you could walk away with a big sum. Depending on how long ago you bought that home and the location, you could be looking at buying a smaller place and even a potential second investment property, or an overseas trip without skimping on luxuries.
Save on your monthly expenses
Even if you’ve paid off your mortgage, you’re likely still paying for home costs like insurance, maintenance expenses and property taxes. You could save a substantial amount by moving into a smaller home, whether that’s a house, condo or apartment.
A new senior-friendly home
Big places are rarely simple to maintain: from tidying up the garden, to re-varnishing the deck every couple of years, replacing old taps and repainting some walls. A smaller and newer place usually comes with less chores, more time to focus on your family or retirement goals and less expenses.
And now, let’s take a look at some of the possible cons of downsizing:
Too much stuff
A smaller home means less space. Ergo, you might have to get rid of furniture and quite a few possessions, which is something a lot people struggle to do. It’s also very normal for children to move out and leave a lot of “memorabilia” in their old rooms. Given that it takes time to downsize, you might end up paying for additional storage.
Moving expenses
Although you could end up in a better financial position after you downsize, your move likely won’t be cost-free. In addition to moving expenses, you’ll probably face transaction costs associated with selling your old home and purchasing a new one.
Adjusting to a smaller space
Although it may sound like exactly what you need, after spending many years in a more spacious home, you might feel somewhat cramped as you settle into a new, smaller home. For some retirees who’s family is located in a different region, the new space may come with less visits from relatives, or the need for you to come to them if you can’t accommodate them anymore.
These aren’t the only pros and cons to consider, but they should give you a good starting point. There are many factors to consider: Are you moving to a place that offers good transportation and health care options? How will you feel about leaving behind a neighbourhood you may love? Is it worth the hustle?
As you can see, there clearly is no one right answer for everyone with regard to the downsizing question. So, take the time you need to weigh the pros, cons and intangibles. Once you consider all these factors, the chances are good that you’ll make the right choice.