Retirement And Downsizing

Downsizing and retirement

As you get closer to retirement, we need to think of our future home as a living expense rather than an investment.

Once you retire, you’re liable to only buy one house. Although you might think about
buying a property with more room for your loved ones, you might not spend as much
time thinking about the costs that come with it. It is prudent to use the equity you’ve
assembled from your existing home to buy something smaller. These five aspects are
the most vital when determining if downsizing is suitable for you.

1. Think about home ownership fees

As time passes, it may get troublesome to clean, fix, or reach specific spaces of your
home. If your property has been around for a while and has become too big for your
family, this may be problematic. You need to begin hiring carpenters, cleaners, and
other tradespeople to help you with the task of maintaining your home. Such costs can
become a burden when you’re dependent on a fixed income.
It will be advantageous to relocate to a smaller home that’s closer to family. Not being
home as much can lead to reduced costs for the  upkeep. If you’re loved ones can aid
with the process, it could eliminate expenses altogether. For a bigger property, possible
HOA fees, property taxes, gardening, and exterior upkeep, the utilities that come with
the maintenance of a bigger house are not to be forgotten, either. These are all key
aspects in determining if downsizing is right for you.

2. Consider the non-financial expenses

A retiree or someone about to retire that is selling a property they resided in for most of
their lives must be kept in mind. Will you be relocating to a warmer climate
where life is more fun and simple? Relocating to an area that caters to a specific
demographic is common for many retirees. Additional accessible parking spots might
become available, and so, too, will arise in the amount of healthcare providers.
However, if you’re relocating to be near family, that may also raise your quality of life.
How such aspects weigh against any emotional aspect of selling must be considered
before relocating.

3. Don’t forget that a home is not a long-term investment anymore

You’ll probably only purchase one home prior to the start of retirement. Since this
property may be the final one you possess (without plans to sell it), you won’t have to
consider how the market will adjust over the next five to ten years. This provides you
with the leeway to select a property based on personal desirability and cost. You don’t
have to think about being close to a school or workplace. You can pick a townhouse or
smaller apartment in a neighborhood without worrying about other factors. This harkens back to the quality of life, which you will be in a position to think when buying a
property.

4. Determine the buying and selling costs

There are selling costs involved even if you are in possession of a home. You might have
to make modifications to the unit before putting it up for sale. There are also advertising
expenses associated with promoting the home. If you choose to hire a real estate agent,
you’ll need to pay for the realtor’s expenses. Costs of selling accumulate on any
property. There are also moving expenses. Use these figures in addition to the other
aspects prior to making the choice to downsize.

5. Don’t Take Rentals Off The Table

If you’re relocating to a new area, it might be a good idea to rent a unit for a year to determine if
you enjoy living in a particular area. Many cities have a ‘best-kept secret’ – an area
where you blend in and where everything you desire is close by. It can be hard to find a
place like this without having a solid grasp of the neighborhood. Renting is the
workaround to this issue. Also, maintenance expenses are far less when renting a unit,
keeping in mind that maintenance and grounds fees tend to be handled by property
management companies.
Each one of these aspects will aid you determining if downsizing is right for you,
especially if you’re a retiree or pre-retiree. There might be more aspects to think about
as depending on your circumstances. If you’re in a scenario where you must sell your home quickly
and with minimal effort, we can help facilitate the process. Call us now at (508) 433-
7037.

 

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