Downsizing is often billed as the ultimate path to resolving money concerns later in life, reducing responsibilities and starting an exciting new chapter.
Many folks who downsize face a financial hardship that needs a short-term fix, but most are entering the autumn years with a family home that’s too big now their children are adults and have flown the nest.
For Americans aged in their 50s and 60s, downsizing was the most popular reason for moving home.
As an experienced local agent, I work with many couples who are ready to cash out. They want to buy a smaller apartment or condo and use the residual money to enjoy the rest of their life.
It all sounds so simple, but there are a few traps to avoid. My most important advice is to seek professional financial advice to ensure your downsizing will achieve your lifestyle goals.
Below is an eight-point guide to help get you started. I hope you find it helpful. In the meantime, if I can help sell your current property or find your perfect new home, please do not hesitate to contact me.
- Do the math – Use an accountant or financial adviser to help you calculate the amount you need to maintain or enhance your lifestyle. It’s dangerous to assume that selling your current home will fix everything.
- Your crystal ball – Spend time considering how you intend to live the autumn years of your life. For example, if you want to remain active and be surrounded by a solid social network, then community-living might be the answer for you.
- See the world – Travel is usually high on the agenda of folks seeking to downsize. When you’re looking at property, bear in mind how much travel you intend to do. If you’re going to be away for long stretches, you want somewhere with good security and low maintenance.
- Community of friends – Consider the social impact if you move away from your neighborhood. Sometimes, folks do this to be closer to their children and grandchildren. If that’s you, then investigate community villages with organised social events for residents. Social interaction is important as you get older.
- Hidden costs – If you’re going into a complex to live in an apartment or condo, you need to factor strata fees into your budget. These levies could be a shock to your bottom line if you forget about them.
- No surprises – Talk to the rest of your family before selling your home. You might find your children have an emotional attachment to the property. If you explain your reasons in advance, they should be more understanding of your decision.
- Big throw-out – Downsizing means you’ll have to confront the often-emotional task of reducing your possessions. Always give your family the first opportunity to claim anything of sentimental or practical value to them.
- Still nervous? – It’s always a good idea to talk to others who have downsized and learn from their experiences. You don’t want to constantly look back over your shoulder and wonder whether you did the right thing.