For retirees “downsizing” is a buzzword, but what does this concept actually mean, and how should someone downsize? Look below at the tips for downsizing and how it could be the next move for you.
What does “downsizing” mean?
“Downsizing” means reducing the size of your current home, and it generally means selling your home and moving to a place that is smaller. However, the common misconception is that downsizing means cheaper; sometimes it is, sometimes it isn’t, with many retirees opting for more luxurious over bigger when downsizing. For many, to downsize means you will liquidate the equity that you currently have in your property to purchase something else that is more suitable to your plans for retirement. Many downsizers like to move to a smaller property that is fancier and more luxurious, while some choose to purchase two cheaper homes and have a second in a different location. Other examples may including downsizing to an apartment that has facilities such as a gym, spa, tennis courts, 24 hour security etc, or choosing to live in a smaller property on a golf course.
What is clear is that downsizing is much more than just moving out of your present home into a new home. There is a lot of research that goes into making the decision, and one must plan ahead and think about what elements are important to them. One thing a downsizer must remember is to think smart with your head, but always follow your heart and gut instincts.
Should you Downsize?
Should you consider downsizing? Not everyone has to downsize, and people downsize for a variety of reasons. Downsizing frequently comes with retirement when children have flown the nest, although the opposite can happen too when you wish to accommodate all the grandchildren. However, for most, the reason to downsize is that your kids have moved out and you are living in a space too large for just you (and your spouse). Maintaining a big property for just one of two people is also an expense that you could better spend on vacations, eating out and joining classes that you wish to enjoy in your retirement. Maybe, you would like a of change scenery or friendship group, or just live out a dream that you always wanted, or to have an easier life, and to travel all over the world.
Oftentimes people’s circumstances force them to downsize, because of financial reasons. Some downsizers just want extra cash when they retire, so they sell their property and purchase something cheaper. Sometimes people just have to downsize, because of their health and they have to move to a place that offers support such as a retirement village or home.
- Always assess your own personal needs not just follow the trend
- Don’t rush, take your time to find the right property and get the right price for the house you are selling.
- Think about the type of property that you will need. Do you want a small house, townhouse, apartment with or without stairs, retirement village, or something different?
- Seek professional advice first, then research the real estate market before you buy or sell.
- Consider whether you can afford to rent out your first home, using the income to pay for a smaller rent on another property.
- Look over the new location first and if you can rent first, then do so. It’s always best to ‘try before you buy’ with renting.
- Make sure that you are close to family, friends, transportation, and places that you would like to go.
- Always seek financial expert advice to get the most out of your retirement money
- Never make quick decisions
- Do not spend all of the money that you get from the sale of your property.
- Never purchase a property that you feel pressured to buy.