Downsizing simply means selling your old home and buying a smaller one. Maybe your kids have left home and you want to enjoy your retirement in a new location on a smaller scale. Or, perhaps the effort required to maintain a home is simply too much as you get older.
Downsizing to an apartment or townhouse living also offers better security and little or no lawn to mow, leaving you with less work to do and more time to enjoy yourself.
That’s certainly an attractive thought!
Of course, downsizing may not put extra cash in your pocket; in fact it can cost more.
Upmarket apartments on the water or near the city often cost more than a four-bedroom house in a middle or outer suburb. You could also lose thousands in agent’s fees on your sale and stamp duty on your purchase.
And, if the move does leave you with extra cash, it may have an impact on your pension entitlements.
All these issues need to be researched, discussed and resolved before you make a decision.
Here’s what we suggest when you are considering down-sizing:
- Start your process early if you intend to downsize. It’s a stressful thing to do and doesn’t get easier.
- Buying a home can often be an emotional decision. Use rational thinking and stick to the facts with your investment.
- Consult an accountant to see if this move will impact your social security.
- Consult a solicitor before signing anything. Don’t get caught out.