There are countless reasons you may be thinking about downsizing your home. Whether your children have moved out, you’re planning for retirement or working with less income, downsizing to a smaller home may be something you want or need to do.
However, downsizing is a big adjustment. There may be many life changes you’ll need to plan for in the coming years. Before you start house-hunting, here are a few things to consider when downsizing your home.
1. Planning in advance
Selling a home takes time – especially if you’ve been living there for decades. Before you think about selling, you’ll need to take stock of your furniture and belongings to determine what stays and what comes with you to your smaller home. You may also wish to update any outdated features to maximize your selling price.
Sorting through furniture and mementos can be an especially time-consuming and emotional process. Experts recommend that you start planning the downsizing process three to five years in advance to give yourself time for these steps.
2. Exploring different housing options
When choosing your new home, you should consider what will be best suited for your future needs. A two-story home may work for you now, but will climbing stairs be a challenge for you in five or ten years? Do you need a second bedroom for visiting relatives?
You should also think about your potential neighbors. Would you prefer to live in an apartment or retirement community or somewhere more remote? Stay open-minded and think about what will work for you.
3. Location, location, location
Deciding where you want to live is another big decision when downsizing. Do you wish to live closer to family or somewhere with a warmer climate?
It would be best if you also considered what taxes would be like before you relocate. Can you afford to live in a state with higher property and income taxes? Remember, you may have a reduced income after retirement.
4. What you can afford in the future
When downsizing, you’ll need to plan for what you can afford down the road. You’ll need to consider the cost selling your home, taking out a second mortgage, and what your income will look like after retirement.
While you may be able to afford a nicer home or higher taxes now, you may find yourself with less disposable income once you retire. Considering these factors before you move will ensure you don’t bite off more than you can chew.
Downsizing is a significant milestone as you move to the next chapter of your life. By taking the time to plan for your future, you can ensure you are prepared when you’re ready to take the next step.