It doesn’t matter if you are looking to free up equity, if you are an empty nester or just got tired of living in a big house in the suburbs and want to move to closer to the action, the fact is that thousands of homeowners are looking to downsize every year. Did you know that one in three Australians over 55 years are considering it right now? Maybe you are one of them.
Owning a large family home with a garden might be the dream when we have young kids. But what was once a dream can become a burden as we get older. Spending part of our weekends mowing and cleaning rooms that we don’t even use is not what we want to do anymore, we want to have free time to socialise, go out, travel or relax in our home. If this is your case, you will find these Rules for Downsizers very useful.
Rule 1: Get your numbers right.
Find out how much is your property worth. Research the market, search online for properties in your area and get different valuations, and keep in mind that the highest estimate doesn’t have to be the right one. Once you have a price for your property, you need to think how much you want to spend on your new home and how much you want to save. Don’t forget to include additional and contingency costs, like legal, taxes, moving, getting new furniture, etc.
Rule 2: Emotions are good, but they should not make decisions.
You might be selling your family home, and yes, it will be sad sometimes. Millions of memories and echoes of the good times we passed will mount up when we must make the final decision. A home is more than brick and mortar, and we will feel a sense of loss at moments. It is all ok, as long as we don’t let those feelings take the best of us and guide us to a decision we will regret.
It is crucial that we also keep in mind the reasons that we wanted to downsize, like the freedom from household chores, large heating bills, hours of garden work. Whatever your reasons are to change, keep them always in mind.
Rule 3: Maybe is not downsizing, but right-sizing what you need.
Sometimes is not about moving to a smaller property, maybe you are just looking to change locations or style of home. This is usually the case with families that have older kids; they don’t need to be close to the schools anymore. It’s also what people that have changed their jobs do.
Rule 4: Re-mortgaging could still be an option.
Some people see downsizing as an opportunity to lower their mortgage payments on their new property by paying a large deposit upfront. You should always use the help of a professional financial adviser and keep all options open when you talk with them. Keep in mind that sometimes the cost of the process could outweigh the potential advantages.
Rule 5: Investing the new equity.
Downsizers often find themselves with a large sum of money after selling their properties and buying a smaller one. If that is your case, and keeping in mind that you have probably already engaged with a financial adviser to help you with the process, why not seek other options to invest your capital? We all know that leaving the money in the bank is not going to generate a good return. So, why not listen to what the experts can tell us?
Rule 6: Get the family involved.
It is time to ask our grown-up kids and other relatives to help us declutter by collecting their ‘treasures’. Those things that we have become wardens of and most people are thrilled to preserve as long as they are kept in someone else’s house. You will be amazed at how much space is occupied by those boxes that haven’t been touched in years. It is also an excellent moment to legate antiques, heirlooms and other possessions that will be enjoyed by the younger generations and will free space for us.
Rule 7: Moving is the priority.
I know you probably want to take that beautiful wooden table that hosted so many family dinners, but you also need to be practical. If you put all your furniture in a smaller space, you won’t be able to move; it’s that simple. A good exercise is to visit the new property when it’s empty and use sticky-tape to measure the floor. Find out how much room you need to move comfortably around your new home, and you will know what furniture fits and what doesn’t.
Rule 8: Take your time.
You should not try to do the decluttering, organising and moving all at once. It can be stressful if you don’t have enough time. Decluttering through your memories and possessions with a fixed deadline over your head is a recipe for disaster. You need time to make sure what things you can leave behind and what things must be part of your new life.
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