Many Canadians (ex. Baby boomers) are at the stage of their lives where their children are moved out and are now making the decision on whether they should retire and downsize. Downsizing isn’t for everyone, many do not want to downsize into a smaller house when they retire or do not want to change their lifestyle. Many people who are downsizing want smaller houses because it’s less stressful and less square footage to take care of, but many want to hang on to things such as their large yards and entertaining space. Here are some helpful steps to avoid when purchasing a smaller home:
- Miscalculating the monthly costs: Although it does take a lot of money to maintain a large house, but moving into a smaller house or condo doesn’t mean the costs will be cheaper. The cost of a smaller living space can be expensive depending on the location you chose. Maintenance and taxes also could be expensive and could affect your monthly budget.
- Overestimating the value of your home: When selling your home, you might overestimate the amount of money you will receive from the sale. This means you need to plan and budget for all extra closing costs that may appear from areas such as: real estate agent commissions, legal fees, and other taxes.
- Hanging on to the past: Downsizing into a smaller home means you might not be able to take all your belongings with you. This also means you need to avoid the temptation to store them, otherwise you’ll be spending money to store stuff you never used in your current home but you think you’ll need. A useful tip is to clean and organize your home before you move and donate or throw away things you won’t use again.
- Not doing your research: If you think you have found a location you think you would like to live but are unsure of the environment, consider renting in the area before purchasing the home. Otherwise, this could result in you being committed to a real estate investment you can’t easily sell if you don’t enjoy living in the area or home.
- Not giving yourself enough space: What are the most important rooms you can’t live without in a smaller home? Instead of retiring are you looking for a job with less stress and responsibility? Even though your children have moved out do you still entertain and have family and friends stay over? If so, maybe a condo or a small house isn’t the right choice. A lot of people who want to downsize after their children move out think they need to automatically sell and downsize. That might not be the best option for you. Therefore, if you are still able to afford to live in your home when you’re transitioning into retirement or in retirement, then you can consider living there a little longer.
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