One of the questions many owners ask themselves is “should I downsize my home.” How to know when it is time to downsize your home is a very personal subject! With the size of the average home in the U.S. bigger than ever, many owners are finding themselves in living spaces that are larger than they want or need. You may have bought a bigger home for your growing family, or maybe you bought it because it was a good deal.
Perhaps you were doing well financially, and you wanted a home that reflected that. Whatever your original reason for buying a bigger home, if you are now thinking of downsizing, you are not alone. As life goes on and your needs change, finding a smaller home can be ideal.
The kids could be off to college and not coming back or maybe you are heading towards your retirement years and would like to find 55 and over housing? Whatever the reason it may be time to downsize into a home that meets your current or projected lifestyle.
Below you will see eight questions to ask yourself when you’re considering downsizing to a smaller home or condo. Does downsizing your home make sense? That is a question only you can answer but here are some things to think about.
Should You Downsize Your Home?
1. Have the kids moved out of the house?
One of the main reasons why so many owners go big with their home purchases is to fit a growing family. But when the kids go away to school or move out of the house to start their lives, it can leave many bedrooms sitting available – rooms that have to be cleaned, spaces that wind up being heated and cooled with no one in it.
If you no longer need a four or five bedroom home, it makes sense to move to something smaller and cheaper. In fact, you may find that a large chunk of change is going out the door to pay for your kid’s college degree and the home has become a financial albatross. Money is often a top consideration for knowing it is time to downsize your home.
2. Do you want to keep costs down?
Expenses are a major reason how to know it’s time to downsize your home. Big houses are expensive to maintain, to insure and costs more in property taxes. Big homes also lead to higher utility bills. With a smaller home, you will save money on your monthly and yearly costs. If you are close to retirement or you are already retired, these savings can make your retirement income go much, much further. The question of “when to downsize my house” is often precipitated by trying to changes household expenses.
3. Are you going through a divorce?
One of the most common reasons people downsize from their current home into a smaller property is because of divorce. While nobody plans for divorce, it is a common occurrence. A large percentage of the time the marital home is sold, and both spouses end up with a smaller home or condominium. Selling a home while getting divorced brings with it some tough decisions when it comes to real estate.
Does either of the spouses want to keep the home? Does one need equity out of the home to purchase another property? Are there children involved that will stall a move to a different home due to schooling or some other practical matter?
While divorce is one of the most prominent reasons people decide to downsize to a smaller home, it is also one that needs the most thought to get things right. If this is the cards that life has dealt you and you will be buying shortly take a look at the tips for buying a home after divorce. The article will give you quite a few things that should be factored into your decision making.
One of the biggest mistakes I see some people make is their insistence on keeping the marital home. Sometimes divorce can make your decision making go askew. Clearly, downsizing should be the answer due to finances and other matters, but that is not what happens. The win at all costs attitude is what tends to cause people to make stupid choices.
4. Do you have a lot of equity in your home?
If your home is paid off, or if you have a considerable amount of equity in your home, you may be able to sell your home, buy a smaller house in a cheaper area, and still have a sizable amount of money left over.
Depending on where your home is located, the market and how much the home as appreciated in value, you may find that your home is now worth far more than you realized. You can find a smaller, less expensive home and add a lot to your retirement – or use the money for whatever you need it for. Let’s face it not having the burden of a mortgage feels good as well!
Do, however, make sure you are up to speed on real estate capital gains tax laws. This is one of the best home ownership advantages from a financial standpoint, given the fact you can exclude up to $250,000 in profit if single and $500,000 if married. As great as the tax code is, if you live in a large, expensive home with tons of equity, you could have a good size tax bill.
5. Is your home located in a desirable area?
There are a lot of factors that people consider when buying a home. You may have purchased your home because it was in an affordable area. If you bought in an accessible area, you might have noticed over the years that the area became more popular, and less affordable, as time went on. The more desirable your area has become, the more expensive your home may be now. Quality neighborhoods have characteristics that the vast majority of buyers desire such as convenience to shopping, restaurants, schools and major highways.
6. Do you live in a good school district?
If you moved into your home because of the school districts, you might be paying quite a bit in property taxes – which made sense, when you had kids in school. But if your children are no longer at home, does it make sense to keep paying those taxes?
You could move to an area with much lower taxes without needing to worry about the school district. There is a direct correlation to schools and real estate market value. While taxes may be higher, you can also expect your home value to be that much better as well.
7. Are you worn out from taking care of your property?
Big homes require a lot of maintenance, as do big yards. Keeping a big home clean and in good working order is a lot of work. Mowing a big lawn takes a lot of time, and cutting the grass only gets harder as you get older.
Raking up the leaves in the fall is tedious even when you are young and fit. Keeping up with the leaves when you are older is tiresome. You may pay for landscaping and cleaning services to take care of all these things, or you may just be resolved to working for hours each week on keeping up your property. Either way, you may be wondering if there is an easier option.
A small home takes less effort to keep up, and a townhouse or condo is even less work because the exterior work is handled by the management company. You should get a complete understanding of which housing choice makes the most sense a home or a condo.
Have to look at the advantages and disadvantages of homes vs. condos. If you travel a lot of just don’t have the time necessary to keep up with a home, a condo may be the best move. If on the other hand, you can’t stand the thought of losing control what goes on around you, a home may be the wisest choice. When downsizing these are subjects that should be thought through thoroughly.
8. Do you want a change of scenery?
A big, lovely home can start to feel like an anchor. Sure, the home is impressive, but even the most impressive home can start to drag you down if you are ready to move on to a different area. You may want to live next to the ocean, or in the mountains, in a city or out of one.
Many times people want something different, which is perfectly OK. Maybe hot desert air is calling to you, or you want to relax in a small, quiet town. Whatever location you are looking at, chances are if you sell your big home you will have the ability to settle there in a small, modest home.
When folks get older in life, they may also find that instead of having one big home they would rather have two smaller properties. Sometimes people don’t want to leave the roots of their hometown, so they will and buy a smaller property in the same location. They will, however, also buy a second smaller place in an area they have vacationed in and simply love. Maybe downsizing sounds appealing to your for this exact reason.
9. Do you need to be in a different area?
Your life is changing all the time, which means your priorities and the demands of your day will change too. Sometimes downsizing is necessary to accomplish a primary goal. You may have grandchildren you want to be close to, or another family member or loved one that you either want or need to be nearby.
You may have obligations to a group or organization that are hard to meet in your current location. Or you might want to be closer to things you know you are going to need in the future, like healthcare. Selling your current home and moving into something smaller is usually the best way to get close to the things that are important to you. Your willingness to go with a smaller property gives you options.
What if you decide that downsizing your home is not the best move at present, but you need additional funds. Are there any options to get funds while remaining in my home and possibly downsizing at a later time? There sure are! Take a look at the best ways to get the equity out of your home. If you at retirement age, a reverse mortgage is one of the more common ways to remain in your home while also being afforded access to your home’s equity. You can see the pros and cons of this type of loan in the article mentioned above.
Tips For Downsizing Your Home
Once you come to the conclusion that a smaller home is in your best interests you’re going to need some of the best tips for downsizing your home! Here are some pointers for your consideration:
- Access your current needs – for example, do you need a formal living room in your next home?
- Look through your current home and look at everything you can get rid of! Do you have a hoarders mentality? This is something you need to change when downsizing.
- Think carefully about the design of what you want in your new smaller home.
- Measure your current furniture and see what will fit and what won’t in your new place. If you have oversized furniture, consider getting rid of it.
- Sell items you know you will not be taking with you. A garage or yard sale is one of the best exercises when moving to a smaller home. Here are some great tips on having a garage sale.
- Figure out the storage area in your new home. Sometimes people overestimate going from a large to a smaller home in the area they will have.
- Understand the best methods of packing your home for a less stressful move.
Additional Helpful Home Buying and Selling Resources
- Stress relieving tips for moving out of state via Kyle Hiscock.
- Financial thoughts when downsizing in retirement via Wendy Weir Relocation.
- Position your home to sell for top dollar via Teresa Cowart.
Use these additional resources if you find that downsizing your home is the right move at present.
About the Author: The above Real Estate information on the how to know it’s time to downsize your home was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 29+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.