The Financial Benefits to Downsizing
Downsizing the space you call home has many benefits at any stage in life, but particularly in the lead up to retirement. With fewer physical demands like cleaning, maintenance and dealing with that pesky collection of clutter, many decide to opt for a smaller dwelling toward retirement, and rightly so.
The most notable reported benefit, however, is seen in black and white on the bottom line.
Let’s take a look at what financial savings you can expect to see upon downsizing ~
Equity - How much is enough?
If you sell your large family home and buy a smaller one, you should be releasing equity in your home and have more money to spend on the things you love. However, it really is crucial that you do your research into the market value of your current property and then logically evaluate the value of your new, smaller home including add on costs to best project the potential financial gain in downsizing. Being aware of hidden costs like future repairs required on your new home, change in fixtures and furniture to accommodate your smaller space and moving costs can help to keep your outgoings low and make the decision of which home to purchase, easier.
Fewer maintenance costs
Fewer rooms, less bathrooms and smaller gardens mean less financial input into repair and maintenance of your home. It is safe to assume that the monthly costs of cleaning products, paints and hardware, pool chemicals and plant fertilizers will decrease, along with the costs associated with maintenance contractors for lawn mowing and cleaning. You’ll not only save money on maintenance; you’ll also save oodles of time you’d usually spend on property upkeep.
Reduced taxes and insurance overheads
It is easy to forget just how many taxes we homeowners fork out. Land and property, stamp duty, rates and even homeowner association fees add up considerably across a financial year, leeching hard earned dollars from your savings account. Generally speaking, downsizing your living quarters will also downsize the amount of annual taxes and insurance fees you’ll pay, so it’s worthwhile bearing this in mind.
Less quarterly utilities
A smaller home is cheaper to keep cool in summer and warm in winter, and fewer living spaces means less lights left on or televisions accidently left running, chewing into your electricity usage. Less bathrooms and smaller gardens equate to less water usage to shell out for while a smaller but more efficient kitchen can save you money on the gas bill. Downsizing your home can definitely, and quite frankly very quickly, slash your utility bills.
Downsizing can be a decision that impacts the heart, the mind and the purse strings. It is a decision that requires careful consideration and substantial planning, and if done right, can be an incredibly liberating experience. If you, or someone close to you has made the decision to downsize, get in touch. We can help to assess your next steps in a no-obligation, free face-to-face consult, to help reduce the stress, to-do list and the hidden costs so often involved in downsizing. And with a background in Real Estate, we can also assist with careful selection of your next move.