Sep 10, 2020 11:33:12 AM
If your family's left the nest and you can't afford or don't feel like maintaining a large house any more, downsizing to something smaller could be a smart decision. But selling a home and buying a new one is always a big decision that requires careful consideration first.
Read our short downsizing guide to get an idea of some of the pros and cons involved and how to downsize your house stress-free.
Pros of downsizing
- Save money on living costs in a smaller home
- A smaller home is easier to clean and maintain
- Design a convenient and accessible home for your retirement
- Benefit from the facilities of a retirement village
Cons of downsizing
- Deal with the cost and hassle of moving house
- Less space for your belongings
- Possibility of unfamiliar surroundings and strained relationships
- Sentimental attachment to your old family home
How much does downsizing cost?
Downsizing makes good financial sense to many people, but in some situations you could be worse off, especially if you've already paid off your current home and now have to deal with another mortgage or rent payments.
Downsizing your home could mean you spend less on utility bills (particularly heating and cooling), insurance and maintenance costs. Along with the sale value from your old home, this could free up money to give you more financial security or spending money in your retirement.
On the other hand, you also need to consider downsizing costs such as:
- buying and selling fees
- stamp duty
- agent and conveyancing fees
- removal fees
- ongoing service fees, if moving into a retirement village
Make sure the new home you choose suits your budget and your lifestyle.
How to downsize your belongings
For many people, the hardest part of moving into a smaller home is having to get rid of some of their possessions, but this can also be a great opportunity to declutter and get a fresh start. Some tips to help you downsize your belongings are:
- Consider whether you will really use an item again
- Make 'yes' and 'no' piles, but no 'maybe' pile
- Don't pay for a storage unit, unless you strictly need it
- Sell items online or at a car boot sale
- Donate or throw away unneeded items at least one week before moving
What to do on moving day
Avoid problems and last-minute panics on the day of the big move by planning long in advance.
The day before the move:
- clean your oven
- defrost fridges and freezers
- unplug appliances
- pack your personal belongings
On moving day:
- clean and vacuum every room once they're clear of boxes
- switch everything off and take final meter readings
- check all doors and windows are locked
- hand over your keys and pick up your new ones
What are the alternatives to downsizing?
Downsizing your home isn't the only way to free up some capital for your retirement. If you prefer to stay where you are, you could consider:
- renting out unused rooms
- converting to a dual occupancy home
- releasing equity with a reverse mortgage
Where can I get help?
If you're thinking about downsizing or making other changes to your property, talking to a property conveyancer can help. Call East Coast Conveyancing on 1300 327 826 or download our free ebook for more selling and downsizing tips for seniors.
