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Now that you’re nearing or at retirement age, and the children have all left the nest and gone on to build their own lives, you’re left with an oversized home with too many empty rooms.

If you’re thinking of downsizing – that is, moving to a smaller home that requires less upkeep – you’re not alone. Every year, thousands of retirees make this decision and downsizing is now considered an American tradition.

It may surprise you to know, however, that it is not only baby boomers who are looking at downsizing. Many millennials are also considering moving to tinier homes for similar reasons as their senior counterparts’. Millennials look at downsizing as part of the “minimalist” movement, which is rooted on the concept of “less is more.”

The perks of living smaller

Downsizing offers several advantages, whether you’re a baby boomer or a millennial.  Some of them are:

  • Cost savings

    Smaller homes in the same or comparable neighborhoods generally come with lower price tags and, consequently, lower property taxes. They also cost less to maintain, and requires less energy, translating to lower utilities cost.

  • Less mortgage

    Lower home value also means less mortgage payments and interest. Additionally, when you sell your existing home, you may have enough funds to pay for a new, smaller home in cash, plus leftover profit that comes tax-free. This can free up your income and allow you to set aside more money to save or invest, or to spend on other things that matter to you, such as traveling.

  • Moving to a better location

    You can choose to move to a neighborhood with a lower cost of living, or perhaps, one that provides all the amenities and comforts that you have always wanted.

How to downsize wisely

In order to take full advantage of the benefits of downsizing, it is important to go about the process carefully. Here are some pointers to consider:

  1. Have a list of the features that you’re looking for in a new home. This is similar to the process you went through in searching for your first home, except, this time, your needs and priorities have changed.
  • Look at condos and townhouses. They offer more convenience and require less upkeep, especially with a homeowners’ association that take care of much of the building’s maintenance and security needs.
  • If you’re a retiree, consider moving to a community that has been especially designed for seniors. These communities often come with a slew of amenities, such as swimming pools, spas, and activity centers. There are golf or waterfront communities to choose from, giving you plenty of leisure and recreation options. Some come with provisions for medical assistance or assisted living.
  • Stage and update your home before putting it up for sale. Minimize the objects and belongings that you have accumulated over the years, and make it easier for buyers to picture themselves living in it. Learn about the features that homebuyers are looking for now, and consider improvements and upgrades that can improve resale value.
  • Find the right financing. With more money from your personal savings and from the sale of your home, you can afford a higher down payment, which can reduce your monthly mortgage amortizations. You may even opt to pay in cash. Look deeper into your options and weigh them carefully to determine which one would leave you with the most favorable outcome.
  • Downsizing can be just as exciting as buying a home for the first time. It can also be just as challenging. Work with a real estate professional to get the guidance you need. Get in touch with us and find out how we can be of help.

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