Downsizing: How to Downsize Your Home Without Regret

Once the kids have flown the nest, many couples find themselves in a home that’s too big for just two people. A smaller place can be a lot easier to maintain, and it can also save you money on things like utilities and maintenance. If you’re thinking about downsizing your home, here are a few tips to do it without regret:

Downsizing your home can be a daunting task. You may have tons of memories in your current home, and it can be hard to let go. But if you’re thinking about downsizing, there are ways to do it without regretting it later on. In this blog post, we’ll give you tips on how to downsize your home without feeling overwhelmed or stressed out. Let’s get started!

Questions to ask before you start looking at another home

Downsizing can open up a world of opportunity. You may be able to purchase a more modern home or one in a nicer location. However, in order to have no regrets, it is wise to think thoroughly through what you really want in your new home. A few examples of this can be:

How much stuff do I have, and what do I want to keep? Where will I keep it all in a smaller home?

One of the main concerns people have when considering downsizing is whether or not they will be able to keep all of their belongings. It’s important to sit down and figure out what you want to keep and what you can live without. If you’re attached to certain items, see if you can find a place for them in your new home. If not, maybe it’s time to let them go or let them live on through gifting them to a friend or family member.

Do I want to keep my current furniture, or do I want to start fresh?

If you are moving from a 4 or 5 bedroom home to a 2 bedroom apartment, it is highly unlikely that all of your furniture will fit. This is a great opportunity to get rid of any old, outdated pieces and start fresh with a new look.

What features would be helpful to have in a home as I age?

Many people find themselves needing to downsize because they can no longer take care of a large home or due to health concerns. If this is the case, it’s important to find a home that will suit your needs as you age. For example, if you’re downsizing from a two-story home, you may want to consider finding a home or apartment with everything on one level. This will make it easier to get around and won’t require as much upkeep. You will also want to ensure you have an elevator if you live in an apartment building.

Do I want to live in the same suburb, 20 minutes away, or in a different city?

This is a big one. If you’re not attached to your current location, downsizing could be a great opportunity to move somewhere you’ve always wanted to live. But if you love your current neighborhood and don’t want to leave, that’s okay too! Just make sure you do your research on the area you’re considering moving to before you make the big decision.

These are just a few questions to consider before you start looking at houses or apartments. It’s important to really think about what you want in your new home so that you don’t end up regretting your decision later on.

What are the benefits of downsizing?

Let’s make this clear, there is no obligation to downsize your home once you become an empty nester or retire. You may have spent years building equity in your family home and enjoy the space, so there is no shame in continuing to live there comfortably. However, there are many benefits that come with downsizing later in life which include:

Living a more sustainable life

Downsizing your home can help you live a more sustainable life. A smaller home will require less energy to heat and cool, which is not only better for the environment but can also save you money on your utility bills. In addition to this, you open up your home to a younger, growing family to enjoy, just as you once did.

Less maintenance and cleaning

A smaller home also means less maintenance and cleaning. This can be a huge selling point for those who are looking to downsize later in life. With a smaller place, you won’t have to spend as much time or money keeping up with repairs and cleaning.

A smaller home = less stuff, which can lead to a more organised and stress-free life

If you’re someone who hates clutter, downsizing may be the perfect solution for you.

Accessing equity to help fund your retirement

Finally, downsizing to a smaller home can free up some of the equity you have in your home to help with your retirement goals. This strategy may allow you to retire sooner, generate more income from your investments which will help lead to a better lifestyle in retirement and give you money that you can put in the bank, use to help your family financially or put towards holidays! 

Potential negatives of downsizing your home

It’s a bit of a hassle…

From selling your current home, finding a new home, deciding what to keep and what to get rid of, and then packing everything up… downsizing can be quite the process. It’s important to be prepared for the potential stress that comes with making such a big change.

However this is most likely short term as once you’re settled into your new smaller home, you’ll probably be wondering why you didn’t do it sooner!

You will most likely have to part with some of your belongings.

When you move into a smaller home, you simply won’t have the same amount of space to store all of your belongings. This means that you’ll need to get rid of some things before you move. For some people, this can be really tough as they may have sentimental attachments to certain items. However, it’s important to remember that material possessions are just that – material. The memories you have attached to them will always be with you, no matter what.

You are most likely leaving a home where many memories have been had.

This is probably the hardest part about downsizing for many people. If you’ve spent years in your family home, it can be really tough to leave all of those memories behind. But, just like with your belongings, the memories will always be with you.

Downsizing your home doesn’t have to be a negative experience. Yes, it may be a bit of hassle at first and you may have to get rid of some things that you’re attached to, but in the end, it can be a really positive experience. From the extra cash in your pocket to the less time spent cleaning and maintaining your home, there are many benefits that come with downsizing.

Crunching the numbers

Selling your family home and downsizing to a smaller place can be a great financial decision. Not only will you save money on things like utilities and maintenance, but you may also be able to pocket some extra cash. Before you put your home on the market, it’s important to sit down and crunch the numbers. See how much your current home is worth and compare that to the cost of purchasing or renting a new place. This will help you figure out if downsizing is the right financial move for you.

There are many things to consider financially when downsizing like:

  • Taxes and stamp duty
  • Pension eligibility
  • Conveyancing and estate agent fees
  • Moving costs

Catalyst Wealth Groups helps many of their clients create long term financial plans to ease the pressure of big life decisions, like downsizing your home. If you’re considering making a major financial change, it’s important to seek professional advice to ensure you’re making the best decision for your future.

Downsizing during a volatile economic period

Australian property has mostly experienced a period of extreme growth over the past few decades. However, we are now in the midst of a volatile economic period which has seen many banks property forecasts predicting a decrease in house prices across the country.

The truth is, while higher interest rates will cause demand for housing to soften and prices to fall, the magnitude and timing of these price falls is difficult to predict. If you want to sell your family home and buy something of lesser value, speak with a mortgage broker or financial advisor about how to best arrange your finances and the best time to start this process.

However, if you are looking to purchase something of similar or lesser value to your current home,this can help reduce some of the risks.

The Takeaway

Downsizing your home can be a great way to simplify your life and save money in the process, but it’s important to do it thoughtfully and plan for all of the potential consequences. No matter what stage of life you are in, Catalyst Wealth Group can help you plan for your future. We offer a variety of services including financial planning, investment management, and retirement planning. Contact us today to get started!