Maybe the kids have finally flown the nest and you’re heading for retirement. Maybe you have just grown tired of the rat-race and you want to simplify your life as much as possible. Either way, “downsizing” can be a great option. Not only can you often sell your current home for a tidy profit, but you can also reduce your future expenses and maintenance costs in one move!
What Is Downsizing?
Confused about the meaning of downsizing? The definition describes a process where individuals and couples clear out their possessions, ditch their big houses and move into a smaller, more cozy place. The goal of downsizing your home is to simultaneously save money and slide into a simpler, easier lifestyle.
Downsizing is something that a lot of older couples do once they find themselves in a house that seems too large for their needs. Some of the financial benefits of downsizing include:
- The ability to use the excess equity in your current home (whatever you don’t put into a new place) to reduce your debt overhead.
- Reduced monthly expenses, since a smaller home also means lowered utility costs and fewer maintenance bills.
- More financial freedom to explore other goals, like starting a hobby business or traveling for pleasure.
- It isn’t uncommon for many people who downsize to go “mortgage-free” on their next homes — which leaves them plenty of money to live comfortably into their golden years.
- More often than most people realize, first-time homebuyers are buying to minimize on home maintenance.
In addition to the financial benefits of downsizing, you are also able to “downsize your lifestyle:”
- Minimize the home maintenance AND square footage! A small apartment or condo is a lot easier to keep clean than a four-bedroom mansion with a yard that you have to maintain.
- In some condo communities, HOA fees cover various home maintenance tasks such as snow plowing, lawn mowing, exterior painting, and even roof repair and replacement. This saves you the trouble of finding contractors and hiring individually.
- There’s also an emotional benefit to decluttering your life and ridding yourself of possessions that you no longer really want or need.
How Do You Start Downsizing?
Downsizing your home can feel overwhelming when you first start — but don’t worry. We have your back! One of our clients, Tony K, said “This is the smartest thing I’ve ever done!” and another client, Herb M. said “I should have done this 10 years ago!”. You can get started with your downsizing today. Here is a guide to help you get started:
1. Outline your downsizing goals
When you’re looking for your new place, all of the options can seem overwhelming! Start the process by identifying your downsizing goals before looking at homes and condos.
Some of the things to consider:
- How much maintenance do you want? If you plan to travel extensively, for example, you probably don’t want to be bothered with lawn care all year and would prefer an apartment.
- How much personal space do you need? Some couples are happy in a one-bedroom place, while others have grown accustomed to having their own rooms. Don’t move into someplace too small for comfort.
- What are your plans for the future? If you’ve always wanted to try metal sculpture, you probably really do need a garage to hold your workshop. Don’t skimp out if it will destroy the vision you’re holding dear.
These essentials will help keep you and your realtor on track! Which brings up our next tip…
2. Talk with an expert
Instead of aimlessly searching for listings, first spend some time with your realtor discussing your actual needs. Your realtor will then limit the real estate search to those that fit your downsizing goals.
Remember that it’s easy to fall in love with the wrong home. Even though bigger isn’t necessarily better, you may start having second thoughts about downsizing your home if you start touring oversized condos and mansions. This complex is why you should outline your goals and discuss them with a realtor first. Don’t waste your time searching for listings! Explain your needs and then let your realtor guide you in the right path.
3. Think about specifics
You’ve outlined your goals, and while your realtor is doing their thing, you can think about some specifics. There are many downsizing opportunities, so identifying a few key amenities or “wish list items” will help narrow down those options.
A few types of downsizing:
- 55 and older communities like Del Webb offer activities to keep you active while minimizing maintenance and financial costs.
- Condo buildings such as Tarkington Tower provide HOA coverage for furnace and air conditioning. Plus you’ll have extra security with a 24 hour doorman who can also sign for all those Amazon packages!
- Condo neighborhoods that offer some yard space and a front porch without the added maintenance. Many communities will plow snow and keep your yard neat while giving you that “house feel.”
You may have already heard of great communities in your area that seem appealing. Feel free to do research and compare notes with your realtor! Then you can determine if these options fit your downsizing needs. Below is a picture from our clients where we were able to help them with downsizing their home.
4. Start paring down your possessions.
It’s generally easier to start clearing out your current home before you start looking for the next. Lay out a schedule (and be generous about the time you give yourself) for you and your spouse to go through each room of the house.
Touch every item you own and ask yourself the following questions:
- Has this item been used in the last year? Are you likely to need it again?
- If this item were lost or destroyed, would you spend the money to replace it?
- Is this something that brings you enough joy that it’s worth keeping?
- Is this something that you want to pass on to your heirs?
If you can’t answer “Yes, absolutely,” to at least one of these questions, it’s time to send the item to a new place. If it hurts your heart to throw things in the trash, consider boxing up everything you think might be useful to someone and either selling it all or donating the pile somewhere.
Consider going KonMari! Marie Kondo’s “KonMari Method” focuses on minimalism and decluttering your items by category. This method not only promotes tidying up, but also discarding items that do not spark joy.
5. Dispose of legacy items now.
Anything that fell into the category of “something you don’t really need, wouldn’t replace and no longer enjoy looking at or caring for” but still want to pass down to your heirs needs to be handled a little differently.
Whether it’s your old collection of movie memorabilia, the fine wedding china or that pair of diamond earrings that came from Grandma, those items do nobody any good (and certainly don’t bring any kind of joy) if they’re sitting in storage.
Why not pass on legacy items you aren’t using to the people you want to see have them now? That gives you the joy of putting something you know will be treasured into the right hands, and it may breathe new purpose into the objects themselves. If you know that your oldest daughter will use the china set for family holidays, let it go! If your son has always shared your love of monster movies, make your collection a gift.
6. Move smarter, not harder when downsizing
Be realistic about your moving plans. Don’t try to manage the entire move yourself. It’s smarter to hire two people and a truck to handle the heavy lifting for you rather than risk an injury that could plague you during retirement. If you have mobility issues or suffer from a condition like arthritis that makes packing difficult, you can even hire a white-glove moving service to pack all your remaining belongings and move them for you. Ask your REALTOR(r) for recommendations because you are not alone when downsizing your home!
Is Downsizing Your Home Right for You?
At some point, “less” really is more than enough. If you and your spouse are empty-nesters or you are otherwise ready to downsize to a new home in Indiana, contact us today to explore your options. We’ll be happy to discuss your dreams and your needs and help you find the perfect place for your future.
Cynthia Yosha-Snyder, cynthia@talktotucker.com