Downsizing for Retirement: What You Need to Know

There are lots of things to consider what retiring and downsizing is definitely one of them. Property expert Andrew Winter explains the essential things to consider before downsizing you home and your lifestyle.

Signs it’s Time to Downsize

If you discover your usage of the parts of the home are almost becoming non-existent it’s time to ship out. If a particular areas in your home hasn’t been used for more than 3 months – and not just to ‘store’ stuff -  then that space is actually redundant.

Keeping many spare bedrooms for overnight visitors that come once a year for two nights, is hardly a reason to retain the unused space. Instead, buy sofa beds for them that can be used in the space that you make use of.

Large storage areas where you store items that never get used or huge gardens that you no longer love and are a pain to maintain are strong signs it’s time to downgrade.

It’s important to remember that downsizing is not a sign of old age, most young people now start their home owning lives in small units and townhouses!

Consider Selling the Family Home

The idea of selling your home – the place you have lived in for years, raised a family in and created long-lasting memories in – can be a daunting idea.

It can especially cause anxiety with immediate family, especially if you are still in the same house the kids were raised in. This is often the trickiest scenario to manage.

If you want to 'downsize' do not let yourselves be guilt beaten into submission just to preserve their 'free storage' space or place to crash at Christmas.

As much as you love having everyone over for these occasions, it can still be done in a smaller home. It can actually be more fun and you wont have to worry about the stress of maintaining a big home when everyone comes to visit.

If your kids still give you grief about selling the family home, suggest that they buy it if they love it so much.

Downsizing Can be Daunting

In my experience the anxiety come from three areas:

  • The physical scale of the new home compared to the current home: The first place to start is to think about what space you actually use in the home day to day. You may well be surprised. For many, it is only about half the size of the home or even less!
  • What will you do with all your stuff: Next, sort through your ‘stuff’. Things should be broken down into three categories - must keep, can sell, can give away to friends/family/charity. Keep in mind that quite a lot may have to go to the tip and don’t be surprised if prized possessions have very little value not just monetary wise. In my experience family members are not that keen on 'cast offs'.
  • And, it has to be said, what will, everyone think?: Who cares! This is about you and your new lifestyle. It’s best to do this big move while you are fit, active and healthy. You can also take advantage of travelling or just getting out and about with all that new time and money on your hands, without the burden of a big house to worry about.

Consider The Financial Benefits

In theory, your potential new smaller home is most likely going to have lower running costs per annum than a large older freestanding home on a large block.

The ideal scenario is for you to be able to sell and, after costs of the sale and purchase, create an extra lump sum to invest. You can add this to your income or, after years of hard work, reward yourself with a rather nice cruise! So do your research and find the real value of our home.

You need this to work physically and financially for the move to be a real double success. Suddenly giving away your prized dining table for 12 doesn’t seem so daunting, does it?

Understand The Hidden Traps

It’s important to have a clear understanding of the buying and selling costs from day one. It’s also a good idea to include costs and realistic values of selling, removing or disposing of excess 'stuff' you have.

These costs can quickly add up and the value of prized possessions are rarely gained. It’s also worth noting timing - start well in advance with clearing out what you have stored. Take it room by room which will make the job much easier and less stressful.

Research what you may need to spend on the new home, then obtain values of your current home plus sale and purchase costs. Armed with this knowledge, start to get ready for the pending move, before any sale board is placed in that front yard.
This way you'll avoid excess stress and panic. I say avoid 'excess' stress as you should expect some - house moving and the downsize can be a big deal to many.

Explore New Areas

This move is about making your life more comfortable and easy, so if being away from family and friends is uncomfortable for you, you should stay local.
On the other hand, if you have these people dotted around the place, consider moving to a new area.

Options need to be amenity and value led, pricey areas could ruin your financial lump sum plans, and moving too far from essential services could make your newer lifestyle an impractical option.

For many, staying close to home works best. If the same suburb isn’t possible try a few kilometres down the road. Choose carefully, knowing the value of your home first and your budget as that has to dictate your search as does the size of the home.

Make The Most of Your Sale

Usually, every last bit of effort can get rewards when selling your home. These days homes that have dated décor, kitchens and bathrooms more than 10 to 15 years old are considered outdated. You need to research whether it is even viable to undertake major renovations and more often than not it’s not, so relax.

Even if you can’t renovate, you should h you can present your house in the best possible way by decluttering and tidying up.

Remove old dated window coverings, open up and let light into the home, undertake essential repairs, like leaking taps, broken fly screens, cracks etc and get them fixed.

A dated but tidy, clean, bright and well-maintained home will sell and often for good money, not as much as a full refurbished version, but you haven't had to spend that money so you cannot expect it.

Andrew Winter is obsessed with houses. With 25 years experience in the property trade, he believes that if you haven’t sold your house within two months then you’re doing something wrong.

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