Five Reasons Down-sizing Might Not Work for You
Down-sizing the family home is a popular strategic move for many approaching retirement. Purchasing or renting a smaller residence may be a good way to reduce monthly expenses and escape most or all of the maintenance issues of owning a a larger, older home. This rapidly growing trend is mostly lifestyle driven, offering more freedom to travel, closer amenities and medical support. Here are Five Reasons Down-sizing Might Not Work for You
Down-sizing is Not For Everyone
1) The process can be costly.
Selling expenses like legal & real estate fees, moving expenses, repairs needed before going to market, staging cost, all add up to thousands of dollars.
2) It may not make long term economic sense
Buying a smaller retirement type home in a good neighbourhood may not reduce your monthly living costs. The possibility of higher property taxes, and monthly maintenance fees should be a consideration.
Renting an apartment can be risky, as the landlord’s mortgage interest rate may increase over time. A 1% increase in a mortgage interest rate would have a substantial impact on the profitability of the apartment building, resulting in rent increases. There are no rent controls in Nova Scotia.
3) Down-sizing also means down-sizing your “stuff” too!
The enormity of the task of de-cluttering and disposing of your “stuff”is often not even considered until the time comes to do it. Having gone through this process myself, I could write a whole separate blog on this topic. Down-sizers are often surprised to discover their children actually don’t want their heirloom dining room furniture, or granny’s old rocker. What to do with 30 years of tax returns and bank statements? You don’t need them but you probably won’t feel comfortable putting the out to the curb. Speaking from experience, LOL!
4) You may wish to keep the family home in the family
Perhaps you would like your home to go to a family member, but you would need the equity in it to buy a retirement condo. The family member may not be in the position to buy it from you now.
5) You may be able to modify your present home to accommodate one level living.
Sometimes, it is just a matter of turning your seldom-used dining room into a bedroom and expanding the powder room to accommodate an accessible shower. You get stay in your comfortable neighbourhood, you would not have to adjust to new neighbours and the renovation cost would likely be less than it would cost to sell your home.
So, am I, a Realtor®, telling you not to downsize? Absolutely not. In fact, I have been involved in over 30 down-sizing exercises recently and all are ultimately very happy with their decision. For most, the biggest challenge was dealing with all the “stuff” that couldn’t come with them! As for renting versus buying your smaller home, that depends on your financial situation and whether you view the new smaller home as an investment or simply a living expense.
I appreciate your comments and I am always available and pleased to answer any questions. Curious about how much your home is worth in today’s marketplace? Get a Comparative Market Analysis here by email!