It can offer a fresh start but think carefully about downsizing from a much loved home.
When we're raising a family, life can be hectic – ferrying kids between soccer training and dance class, cleaning a 3- or 4-bedroom home and maintaining a large garden. It can be easy to daydream fondly about that blissful time when the kids have grown up and you're free to sell up in favour of a smaller, more manageable property.
All too soon that day rolls around and it's crunch time.
Downsizing your home can be a sensible financial and lifestyle decision. But it may also be a move you'll live to regret so it pays to think it through.
Here are some issues to weigh up.
Do you need the money?
It's when we reach retirement that our home proves to be an outstanding investment. By this stage you've probably paid off all or most of your home loan, giving you substantial equity in the place. If you are in serious need of cash for retirement living, selling up can mean pocketing a valuable (and tax-free) capital gain.
Bear in mind though, you will need somewhere to live and buying a new home comes with buying and selling costs like stamp duty, legal fees and associated relocation costs.
These outgoings can eat up a substantial chunk of home equity. Be sure to crunch the numbers to see if downsizing stacks up financially. Or ask your local Mortgage Choice broker to go over the numbers with you.
Is your community important?
If your adult children have resettled to another state or city, selling and moving to something smaller can let you be closer to family.
However it's not always easy to form community ties and build local friendships especially as we age. It can pay to check if there are local community groups or interest groups you could join in the area you're thinking of buying into. These can play a central role in transitioning from one community to another.
Is maintenance an issue?
If you have a rambling home on a large block, keeping the property in tip top shape can become more challenging and potentially more expensive as you get older especially if you need to pay for help looking after the place.
A smaller home can involve much less maintenance though it can also take some getting used to. If you are thinking of a significant shift in lifestyle – like moving from the suburbs to an inner city apartment, consider renting for a while to see if the lifestyle is really for you.
We're here to help
The decision to downsize should never be made lightly. Your Mortgage Choice broker can give you the benefit of an unbiased, expert view - there can be other options to achieve your lifestyle goals beyond selling a much-loved home. Call us today on 13 77 62 to discover more.