Have you been toying with the idea of selling your family home and moving into something smaller and more manageable? Are you an empty nester or do you have the urge to spend more time travelling? Is maintaining a big house becoming a chore?
Downsizing is a natural step. Almost everyone older than fifty thinks about downsizing at some point in time. As the market corrects, real estate experts are predicting that this should be a really good year to act on your plans.
Downsizing can have a major impact on your lifestyle, both good and bad. It is a move that requires lots of careful consideration and it is not something that should be jumped into.
Before you make the decision to downsize, ask yourself these questions!
Is your current home too big?
When your children move out and you find cleaning those empty rooms and maintaining your treasured garden becomes a bore, downsizing to a smaller property seems like the obvious solution. Anyone who has had to vacuum a near-empty four-bedroom home for years on end will confirm that wasted space can be physically taxing, especially as we get older.
Even if you have managed to pay off the mortgage, ongoing expenses like rates, power, water plus the financial and physical cost to maintain your home, all takes a big chunk out of your budget. Could these funds be better utilised in your superannuation or retirement fund? For many of us, selling your home and purchasing something smaller could free up a sizeable nest egg.
The Commonwealth Government allows a downsizing couple to contribute up to $300,000.00 each into your superannuation fund which can make retirement a whole lot more comfortable.
Do you want to boost your income and reduce your living expenses?
Downsizing to a smaller home provides a sense of comfort through the initial cash injection. However, the real bonus of moving to a smaller property is the reduced maintenance expenses. You will typically use less electricity/water and the rates/insurance costs will generally be well budgeted for.
Moving to a strata or retirement community will help control your budget as the quarterly levies are reoccurring charges that are paid at regular intervals. Strata fees cover the costs of building insurance and maintenance. Whereas, retirement community levies generally cover building insurance, council rates, building maintenance and in some cases, water and electricity.
Will you need room for guests?
When it is time to buy your new home, make sure you consider if you will need to have space for guests. Those who have children who live far away, grandchildren or friends who love to stay, may prioritise having enough bedrooms in order to host them. However, if this is not the case, you may consider turning the living room or study into a makeshift bedroom through adding a sofa bed or futon.
Do you want more free time?
Moving into a smaller home should free up lots of extra time for you to spend doing things you enjoy. Things such visiting the grandchildren, meeting friends for lunch or volunteering.
Without a large house and yard to tend to you will spend less time spent doing regular household chores so you will have so much more time for yourself.
What kind of lifestyle do you want?
Whether you are a retiree or working towards retirement, this is the time you can choose to live life on your terms.
Your dream may be to live closer to your family, or to take leisurely strolls along the beach every morning or to even just lead a simpler life.
Once your plans to downsize are in motion, the next questions to answer are: Where do you want to live? and what type of property will suit you best?
Do you want to live in a lifestyle community with heaps of facilities (for example: a retirement village)? Or would you be happier in a small home or apartment?
It is important to consider all the factors that are involved when considering downsizing. If all the answer come up positive, then you are ready to start the next phase of your planning; how to fill the rest of your life.
The “lock-up-and-leave” lifestyle of living that comes within a smaller home is pretty appealing.
By Mark Noble,based on an original article by Tamille Head published on startsat60.com.au. Jan 17, 2020