The thought of exchanging the maintenance of a larger home for a hassle-free future full of travel, friends and new found freedom is a common thought for many, once their children have left the nest. According to Australian Housing and Urban Research and similar sources, more than half of Australians aged over 55 are open to downsizing opportunities.
Did you know that the average Australian homeowner buys three to four properties in their lifetime? Traditionally, they trade up from their first home purchase to a more suitable family home, often upgrade again to a more substantial residence and then downsize upon retirement.
Downsizing often marks the beginning of an exciting new chapter! Whether it be from your children having grown up and left the family home, or perhaps you have held onto that family home a little longer without them and it is now time to retire. There are many compelling reasons favouring the move to a smaller abode, so let’s take a closer look at the upsides of downsizing..
Let’s start with the obvious; the financial benefit
During the time that you have lived in your home, you have likely paid off a significant portion of your mortgage, while the value of your property has also increased. Selling your home and downsizing means that you will have a much smaller mortgage or potentially no mortgage at all! The cash flow that is freed up could mean that you can travel, spend more time with family or simply do more of the things you love.
Be sure to factor in selling and buying costs (including moving costs) when looking at the financial aspect of downsizing and always ensure that you talk to your financial advisor about how a decision like downsizing could affect your Age Pension entitlements.
Less space, more to embrace
Given the reduced space at your new address, measure your furniture to ensure it will fit. Consider carefully if you can see yourself living in this new space comfortably. Make the most of storage solutions in cupboards, under beds etc to try and accommodate the important things that you want to bring with you.
Using multi-purpose furnishings where you can, mounting your TV on the wall, and making the most of Wi-Fi technology are all useful ways to get the most out of your new smaller space.
The upside of having a smaller space is less maintenance and upkeep. With a smaller property usually comes a much smaller yard, or no yard at all. The reduction in gardening time and money spent on tools and the like, means you are free to do more meaningful things with your time and money in this next phase of your life.
A fresh start
Downsizing requires a pretty significant shift in your mindset and a re-assessment of your wants and needs. You aren’t shopping for a house that needs to fit all the family with a second bathroom and a yard big enough for the kids to run around with the family dog anymore. You don’t need to be close to the schools or the great family parks like you used to. This round of house shopping will feel a little different and you will have to re-consider what your new wants and needs are. Just like saving for your first home however, it’s important to maintain a budget when you are considering what you are looking for in your new home.
Downsizing provides you with the perfect opportunity to declutter like never before! Decluttering is an essential component of the downsizing transition as you need to fit your life into a smaller space. Review your belongings on a room-by-room basis and decide what to keep, discard, donate or sell. This process can feel daunting, but it can also feel quite liberating. And when all is said and done, you will feel like you are ready to move into the next chapter of your life, a little lighter than you felt before.
There is no doubt about it, downsizing can feel like an overwhelming experience. It often symbolizes the end of a chapter, saying goodbye to a familiar home that housed many years of special memories. It is important that you consider the decision carefully and when the time feels right, to speak to a financial advisor and engage a trusted real estate agent to help you with the process.