When To Consider Downsizing Your Home
Downsizing is the process of moving from a larger home to a smaller one. And although anyone can downsize at any point in their life, this process is exceedingly popular among older adults that would prefer a space where they can easily access and age in peace. Research shows that 77% of adults over 50 prefer to age at home. However, navigating the specifics of that arrangement can take some careful consideration.
Downsizing can have numerous advantages for those who want to age at home. It can help reduce costs, upkeep demands, clutter, and other potential benefits. Evaluating your circumstances to understand how downsizing will affect your quality of life is a good idea.
Reasons to Downsize
There are many potential reasons for downsizing. Several factors could make a downsized home an attractive option. It may be a good idea if you find yourself facing one or more of the following situations.
Your Home No Longer Fits Your Needs
As people age, their needs transform. A two-story home may make sense for a younger family just starting. But when kids grow up and begin to move, the extra space may not be necessary, and taking care of it may pose an undue burden.
Stairs can also pose an issue for mobility. Ramps, handrails, walk-in showers, and other accommodations can help, but it may be easier for someone with mobility issues to move into a single-story home.
You're Paying Too Much
Although this may not always be the case, downsizing generally comes with financial benefits. With less square footage, you'll pay less on a mortgage or a rental payment and be able to dedicate those remaining finances elsewhere. Many experts recommend a guideline of paying no more than 30% of your monthly income on rent or mortgage. However, this is just a guideline; other factors could contribute to whether that ratio is reasonable.
Sticking to this guideline or finding more ways to save as you approach certain life events like retirement is vital. A fixed post-retirement income may offer less flexibility in terms of manageable costs. Downsizing could make your financial situation more comfortable and your living arrangements more sustainable.
You Can Make Money from Equity
If you own your home, it may be worth more than you paid. In this situation, selling your current house, buying a smaller, less expensive one, and making a profit might be worthwhile.
To make the most of when downsizing, try to find a home that will cost less in the long run. A large influx of cash from selling the house may be pleasant now, but if you spend that extra money remodeling, performing repairs to your new home, or paying for other surprise costs, it may not be as effective of a downsize as you may have hoped.
You Want a Closer Community
Moving to a community of friends or people with similar life experiences can be another reason to downsize. Having a support network of neighbors around your age can be comforting, especially if you are retired, and many of your current community members are busy with work or family obligations.
Downsizing, for this reason, can have health benefits as well. An active social life and community participation can lead to a longer, healthier life. Social life should be essential when downsizing to a neighborhood such as a community center for older adults.
You Could Be Closer to Family
As families grow and spread out, family members can become lonely due to the inconvenience of visiting. Remote locations can also pose safety concerns for older adults who may need support from family. Downsizing is a good excuse for moving an older parent closer to family or being close to relatives.
Relocating closer to the family also allows grandparents to bond more with family, especially with raising younger relatives and passing on family traditions.
Mistakes to Avoid When Downsizing
After deciding to downsize, it is just as vital that you make proper arrangements. There are some factors of a downsizing move that could cause potential issues. Preparing appropriately for these potential issues can help to avoid trouble or falling into a similar situation to what you were trying to leave.
Underestimating the Cost of a Home
Make sure you know the true cost of buying your new home. The asking price is likely your primary consideration but only part of the equation. It would help if you also thought about your down payment, which lenders may require to be as much as 20% of the total cost. There is also property tax and homeowners insurance to consider.
Additionally, consider any repairs or remodels you must make before moving in. These factors could make waiting and saving up more worthwhile before buying or looking for another home option entirely.
Underestimating the Move
Moving is never easy, and the work can be much more time-consuming and laborious if you've lived in your current home for a while. After all, the longer you live in a particular place, the more items you typically accrue.
Moving your belongings can cause logistical problems, particularly with fragile items. Enlisting the help of a pack-and-ship service makes moving easy.
How many items you will need to move, how far you are moving, and how much help you will have with the move can all play a significant role in how difficult the move will be.
Keeping Too Much Stuff
Moving offers an opportunity to downsize your belongings, but deciding which items to get rid of can be difficult. However, it can be an essential aspect of downsizing since it can lead to a more practical, manageable move.
Moving a small number of belongings can be faster and more economical than moving large amounts of items. Smaller moves can help avoid the unnecessary costs of large truck rentals or renting temporary storage during the move.
Timing It Wrong
Buying or selling a home also involves an element of timing to be the most effective and stress-free. The best time to sell or buy can depend on factors like local climate, so it's essential to consider factors like inclement weather when deciding to show your home.
People tend to shop for homes when the weather begins to get warmer. Early in the year may also be an excellent time to sell since money from tax refunds can play a big part in a person's decision to look for a home. It could also be a boon for you when considering a down payment.
Personal timing may also be a factor. For many people,having their current home sold may be necessary before committing to another mortgage. Alternatively, they may need to finalize the purchase of their next home before selling. This uncontrollable variable could add complications when trying to time a purchase or sale.
Making the Decision to Downsize
Ultimately the decision to downsize is a very personal one. There isn't one universal situation that calls for it. Downsizing should be the result of careful consideration. Consider a move's practicality, including factors like timing, financial burden, and available help.
However, if downsizing could improve your situation now or in the conceivable future, it's important to start making plans sooner rather than later. Benefits like lower costs, closer family, or a more robust community may make the notion too attractive to pass up.