Are you thinking about downsizing your home?
Downsizing can be a sensible option if you’re living in a house that’s a lot bigger than you really need, are looking to reduce your living costs, or would simply like a home that’s easier to maintain. Moving to a smaller property can also allow you to release equity from your home, allowing you to finance other projects, travel or family members without having to borrow money.
Tips for downsizing your home
If you’re thinking about downsizing, these tips will help you make informed decisions so the process of moving home runs smoothly.
Move for the right reasons
One thing you should keep in mind is that you need to move into a home, and not out of one. What this means is that you should be looking at how the new home is going to improve your life in terms of lifestyle, location, amenities, social circle, family connections, and activities. Money should not be the sole driver of your move. If you only focus on the finances, you can easily end up in a situation where you want to move again, and this can easily waste the money you released by downsizing.
Remember also that there are other ways of releasing value from your home. For example, you could rent out a room, or explore options for equity release. Once you’ve made the move to a smaller home it’s hard to reverse the process, so think carefully before deciding that downsizing is the right option for you.
Factor in all the costs
If it has been a long time since you moved, then you might be a little out of touch with how expensive the process can be. When you add up all the extras such as stamp duty, legal fees, estate agent fees, and surveyors’ fees, the cost can be as high as £10,000. This is a lot of money for many individuals, which is why you need to ask yourself if the move is worth it.
You also need to consider the difference in costs when you live in the new property. Things like insurance, council tax, increased or decreased use of your car, and energy efficiency should all be considered carefully to build up a picture of your new living costs. You might find that the savings from downsizing are more than enough to cover the cost of moving.
Scout your locations
It’s not a good idea to choose a location just because you had a great day out there. Instead, try to see it from the point of view of a permanent resident, and someone whose circumstances can change with time. Is this a place where your family can easily visit? Are you going to be able to build a good social life here?
You should also aim to stay practical when viewing properties. It can sometimes be hard to stop yourself getting carried away with an emotional response to a dream home, but it’s well worth being honest about the realities of living there. If you find the perfect house and want to get things moving, sell my house fast is a great option.
Remember that retirement is a long time
In the past, being old meant someone was over the age of 60. This is definitely not the case now.
You might still feel very active and youthful when you reach retirement age, so you most likely won’t want to move to an area where everyone else is a lot older than you. Remember you don’t have to jump too soon, and can always keep the family home a little longer until you are ready. Taking your time will help to ensure you make the best decision for you and your family.
You also need to think about your physical environment from a time point of view. For example, you might love the idea of fixing up a property now, but in the longer term a high-maintenance property might not be the best plan.
Think about what you’re leaving behind
The hardest part of relocating and downsizing is what you leave behind. You will have built up networks and friends over the years – or even decades – that you’ve been living in the area. The idea of a fresh start might be reason enough for some people to move, but think carefully about how you will feel about losing that support network.
It might help to talk with your social circle about the move. It’s possible that your friends share the same downsizing aspirations, and if this is the case you can potentially plan to move and still be close to each other. The other option of course is to downsize to a smaller home within the same geographical area.
This is another tough part of the process! You probably have years of memories in your current home, but you might be forced to squeeze everything you own into a smaller space. You have to plan in advance here, and be prepared to make some difficult decisions.
If you’re still storing your children’s possessions, you should definitely be encouraging them to take what they want to keep, and getting rid of the rest. You’re probably not going to need all your furniture too. Once you’ve chosen your new home, you can work out what you want to take with you and either sell or donate unwanted items. If decluttering is just too hard, you can rent a storage unit, but bear in mind this is only a temporary solution.
Sometimes, downsizing isn’t always just about you and your partner. For example, you may reach retirement age and still have elderly parents to take care of, in which case you may be considering moving them in with you. This can make financial sense, but will impact on the amount of downsizing you can do. In this situation it’s a good idea to discuss the issue with a financial adviser who specialises in long term-care.
Treat it as an adventure
Don’t think of downsizing as going to your ‘retirement home’. Focusing on the things you are leaving behind will definitely make it harder to leave the family home and move onto the next chapter in your life.
Instead, aim to recapture the positive feelings you had when you left home for the very first time. Think also about the financial benefits you’ll be able to enjoy; if you need some help here it’s worth talking to a financial adviser.
Downsizing can be a way for you to take back your freedom from parenting, work, and the stresses you have dealt with in your life until this point. If you see things this way, the process of downsizing will be much easier to manage.
Thinking about all of these areas will help you work out whether downsizing is the right option for you. Have you got any tips for downsizing to add to this list?