When Is It Time To Downsize?
You've officially joined the ranks of the empty-nesters. One of the first questions that usually comes to mind is should we downsize our home. The kids are gone and we probably don't need this big house. But is buying a smaller home right for you? Obviously, there are pros and cons to consider about both your finances and lifestyle before making a decision.
Reasons not to downsize:
- The family is spread all across the country and you want to have a place for everyone to gather for the holidays and vacations.
- You've been in your current home for many years and have filled it with mementos you don't want to part with.
- You're not emotionally ready to pack up and leave a lifestyle you worked hard to create. Leaving family, friends and familiar surroundings is more than you can bear.
- You enjoy the feelings that go along with your larger home. A smaller home will not feel right for your current lifestyle.
Reasons to downsize:
- The lower (or zero) mortgage payment that comes with a smaller home would give you more discretionary funds to travel and enjoy other recreational activities.
- A smaller home means less to maintain and more time to play.
- You and/or your spouse are not able to navigate the stairs like you use. A single level home is more desirable.
- A smaller, newer home is more efficient and cost effective.
- You need to be closer to a family member who needs assistance and your attention.
If you decide to downsize, make sure the new home fits both your lifestyle and pocketbook. Talk with a real estate professional about how much money you will net from the sale of your current home, as well as the costs of buying another one. Look into how much it would cost to move and to maintain the smaller home. Make sure it really is cheaper to live there. Downsize only once you're satisfied that the finances make sense.
Buy into your new lifestyle
A smaller house in your current neighborhood could be the right decision if your priority is maintaining close ties to neighbors. Just make sure there are amenities like public transportation and stores nearby if your health begins to deteriorate.
A retirement community could be perfect if you never want to move again and you want to focus on travel, hobbies and perfecting your golf stroke instead of mowing the lawn. Talk to current residents to see whether they're happy with the rules and the way things are run. Another option you may prefer is a condominium to eliminate the maintenance but not be locked in for life like many life care communities.
It is a big decision to downsize. So, make it carefully, do not rush, and get professional advice about the real estate and financial aspects of moving.
Information courtesy of Huntsville AL Real Estate Expert Mike Manosky.