So, what is downsizing and how can you downsize successfully when the time is right? The term “downsizing” refers to the process in which homeowners sell their current home in order to buy a smaller home or rent. For the most part, homeowners choose to downsize for two reasons:
- They no longer need the space provided by the larger home, and/or
- They don’t want to continue dealing with the upkeep and maintenance costs of their current, larger home.
Typically, those that choose to downsize are “empty nesters” and or recent retirees looking for a change of pace. The category you fit under may affect what type of property you are looking for when you downsize and whether you want to rent or buy. Additionally, you will need to consider if you want to sell your current home or instead rent it out to tenants, thereby earning passive income which can be especially beneficial for retirees.
Downsizing Factors to Consider
There are three primary factors that you may want to think about before downsizing. The first factor is the costs involved with selling. Selling your home can be expensive. You may have to update the home so that it fairs better on the market. Additionally, you will need to hire a solicitor to facilitate the transferring of ownership.
The second factor is the cost of moving. You may need to hire movers and/or a moving truck to aid with the actual moving process. If you choose to downsize to a smaller home, there will be closing costs that you need to account for as well. Additionally, you may need to buy new furniture for the smaller home.
The final factor that you may want to consider is the intangible costs involved with downsizing. If you are moving to an entirely new city, state, or even country, you will also be leaving friends and family behind. Additionally, selling the home that you’ve lived in for years can be hard to part from considering all of the memories made within the home.
Successful Downsizing Tips
Listed below are several tips that can help you downsize successfully:
- Research locations and properties before you visit the home.
- Make a plan on when and how you want to sell and buy.
- Don’t wait too long to downsize.
- Location matters. Try to downsize to a property that is near public transportation and a grocery store.
- Check the BER on the property to ensure the home is energy efficient, thereby saving you money.