Do I Need to Downsize My Home? Five Questions to Consider

February 9, 2023
Ella Martin
Ella Martin

There are several benefits to downsizing, such as cost savings and the desire to preserve a smaller home and yard. Prior to placing a "for sale" sign in your yard, it's crucial to weigh the benefits and drawbacks of downsizing if you're thinking about moving into a smaller house.

Downsizing might appear different for various people depending on their stage of life, such as empty nesters, busy executives, or people in need of a change. If you're unsure whether moving into a smaller house is the best option for you, consider your answers to the following questions.

1. What Are the Benefits and Drawbacks of Downsizing?

Make a list of the advantages and negatives the old-fashioned way right now. Use these variables as a guide when choosing to downsize even though the benefits and drawbacks will depend on your unique situation.

Advantages of Downsizing

- Save money: Your monthly rent or mortgage payment will be reduced, and your utility and tax expenses will also be lower.

- Profit from your present home: Depending on the timing of the sale of your current residence, you may either realize a profit or be able to pay off your outstanding debt.

- Less maintenance: Generally speaking, a smaller home needs less inside and exterior upkeep.

- Accessible features: Older people might wish to downsize to a house with amenities like a walk-in shower, wide corridors, and few stairs so they can age in place.

Drawbacks of Downsizing

- Less square footage: Smaller houses are smaller in size and contain fewer rooms.

- Moving costs: Including the price of hiring professional movers and rubbish haulers, moving into a new house may be pricey.

- Costs of storage facilities: If your new house is unable to accommodate all of your possessions, you may need to rent a self-storage container, which is between $1 and $1.80 per square foot.

2. Am I Prepared Financially to Downsize?

You'll need to spend some time analyzing your financial situation to decide whether downsizing makes sense for you because moving is a numbers game. To assist you make a wise choice, you should speak with your investment manager, real estate agent, and financial experts.

To clearly see how your money may change in the future, ask yourself these questions.

Can I move affordably?

Will my workload increase?

How do I make a moving budget and what are my overall moving costs?

The ideal time to relocate is when?

Before downsizing, how can I pay off my present mortgage?

What will the price of my present property be? Can I utilize the money to purchase my new home outright?

What is my new mortgage payment each month?

3. Am I Prepared to Modify My Way of Life?

Saying you're ready to stop spending a lot of time on lawn maintenance and gutter cleaning is one thing, but embracing a reduced lifestyle is quite another. Take ample time to consider the downsizing lifestyle adjustments even if you are ready to make the move. Most individuals require some time to adjust.

Think about your responses to the following queries:

Is the idea of downsizing exciting to you, or does it feel forced?

Exist any extras in your existing house that aren't being used, such a pool or media room?

Will you have enough room for your favorite hobbies, such as gardening or holiday entertaining?

Will there be space in your new house for overnight visitors?

4. Am I Considering Downsizing and Relocating?

Your lifestyle will be impacted by where your new house is. You'll need to decide if you want to stay in your present town or city or relocate to a new one if you're thinking of moving into a reduced house.

Consider the following inquiries before reducing and relocating:

- Would you like to remain in the same place or relocate?

- How distant is your family from the prospective new location?

- How will the new location affect how long it takes you to get to work and other important places?

- What aspects of your present location would you change, and what kind of setting best suits those goals?

5. Am I Willing to Downsize My Possessions?

Getting rid of clutter and unnecessary or unneeded stuff is one of the most gratifying aspects of downsizing into a smaller house. But not everyone is excited about this procedure. You should think about whether or not you're prepared to part with extra furniture, clothing, trinkets, and other items before opting to reduce your house.

You'll need a purging strategy to assist you make difficult decisions regarding your possessions before you can begin the downsizing process. To assist you in managing your inventory, you may arrange donation pick-ups, host yard sales, and employ a professional organizer. Start by classifying your possessions into those you want to keep in your new, smaller house or need, and those you want to donate, give away, or sell.