Traditionally, we think of the homeowner path as upsizing. When we are young, we buy a small starter home to fit our needs and income. Later, our needs change as our family unit grows, and we move into a larger home to fit our needs. There are times in our lives, however, when smaller spaces might make more sense. Here are four signs that may cause you to consider downsizing.
Retirement Has Arrived
Retirement is one of the most common reasons people decide to downsize. Retirees make the move to stretch out their retirement savings and to decrease their annual expenses. A smaller and cheaper property accomplishes this by reducing property taxes, insurance and mortgage payments.
It’s Simply Too Overwhelming
No matter your age or stage of life, it isn’t uncommon to feel overwhelmed by the size or maintenance of your home. It takes a lot of work to maintain a large yard, or keep lightly used rooms in your home clean. At some point, you don’t need all that extra space anymore. Unused rooms cost money in property taxes, maintenance and utility bills. Moving to a smaller home can mean you consume less energy, use less space and spend less money.
Potential Appreciation on Your Home
For most people, a home purchase is the biggest single investment they’ll ever make, so it’s natural to hope for some return on that investment. In monetary terms, that means home appreciation. When you buy a home, you hope it’ll be worth more than you paid for it by the time you’re ready to sell and move on. Many factors determine home appreciation including renovations you made over time, your land value, and growth trends in your surrounding area. If your home shows positive signs towards appreciating, it may be time to cash in.
The Family Factor
If your adult children have moved out, it may be time to downsize your property. Depending on your situation, downsizing might also allow you to move closer to your children and grandchildren if they have moved far away.