It can be difficult to find the right time to downsize to a smaller home. You may have lived in your current home for a long time, with many happy memories associated with it. But there comes a time when your circumstances change and a smaller home might be better for your situation. There are times in life when it becomes time to downsize your home.
There are many considerations that need to be taken into account when considering downsizing your home and tips to help you make the decision.
When the Kids Move Out
Many people buy larger homes to accommodate a growing family. When they go off to college or move out into their own home, the house begins to seem larger and emptier than it did. It will still need to be heated and cleaned even though it isn’t being fully used as it once was.
It can make a lot of sense to downsize to fewer bedrooms so that you can save money for other important things like paying for college.
Remember, after your children graduate from college, they may come back for a while because they cannot afford to live on their own. they may have accrued debt while in college and need to pay back student loans. They are young adults, and they are not used to all the responsibilities that adulting entails. Young adults generally only think of paying for their rent and cell phone. When in reality, there are those expenses that pop up such as a new transmission for their vehicle, other automobile repairs, or even a new car payment. It takes these young adults time to adjust to adulting.
Reducing Your Expenses
Another major reason for downsizing your home is to reduce the costs involved in maintaining a larger home. You will save on taxes and utility bills as well. If you are looking ahead to your retirement, you can make your money do more for you if you free it from homeownership. If the maintenance of the home is getting too overwhelming, then it might be a good time to consider selling.
There will be less energy usage as there are fewer people living in the home once the children have moved out. Other ways to reduce energy usage in a home can come from using energy-efficient appliances.
When your mortgage is paid off, you could have a significant amount of money tied up in your home. Downsizing to a smaller and more affordable home will ultimately add to the money you have in the bank. This money could add comfortably to your retirement fund or utilized for whatever other needs you have. One consideration if you are downsizing to obtain the funds, be sure to check with your tax advisor as if the homeowner has earned a substantial gain, then the homeowner could be taxed on that amount. Consult your accountant for more details on the tax consequences.How You Know it is Time to Downsize Your Home?Click To Tweet
Moving to a New Location
The reason you purchased in a particular area, may have changed and now you can search for a property somewhere less expensive. Perhaps you moved into your current home because of the stellar school district, and if that isn’t a need anymore, you may find want to live in a new location that is more economical.
The average market value is likely to be higher in the school district as well. So not only are you reducing taxes but also looking to buy a better value house in another location.
There could be other reasons why a change in location is better for you now. This could include the desirability of the area. If you choose to move there because of the convenience of the facilities, shops, restaurants or other local factors, the market value will likely have increased more than other less desirable areas.
You could take the opportunity when downsizing your home to move to a different area, a better area. Perhaps you’ve always wanted to live near the ocean or with a view over a valley that you love, or simply out of the city. If you have a larger home to sell, you should have the funds to make that possible. Perhaps you could purchase two properties smaller than your current property to give you the best of both worlds. If you are moving to a home with a smaller garden there are stunning design ideas for small gardens.
If you are in the process of divorce or a break up from a long term relationship, you are likely to downsize. While you may want to stay in the marital home, that may not be reasonable given your new financial situation. Choosing to move into a smaller house when a relationship ends, means that you won’t be overextending your finances which you could later regret. There are steps to take when purchasing a new home after a divorce.
Reducing Your Chores
A larger home not only has higher expenses but involves more work to take care of household maintenance. While the maintenance may have been very manageable when you bought the home, things begin to get more difficult as you get older. Smaller homes are naturally going to require less work both outside and in. Less cleaning, less lawn to mow, and less maintenance all around.
You may have paid people to do some of these chores, but it is still something you have to think about and an expense to cover each month. Buying a smaller home, such as a condo, could even mean that a management company deals with the exterior of your home. It does mean less control of your property but that could be what you are looking for as you head towards retirement.
If you are a senior and are looking for a home, there are factors to consider when aging in place. Try to anticipate what your future needs may be, and consider a single level home.
When you are considering the reasons to move from a larger home to a smaller home, there are many factors to consider. It is always going to be a difficult choice but one which can have many benefits and offer better options as you move into a new stage of life.