what is downsizing a home

Full Answer

What do you need to know before downsizing your home?

• Take photos of your home before you downsize. ...
• Keep things you want, use, need, or like to look at. ...
• Don’t over-save for the next generation. ...
• Give with no strings attached. ...
• Create 'safe passage' for the possessions you give away. ...
• Stop acquiring. ...
• Take only the favorites from your collections. ...

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What is the best way to downsize your home?

Steps

1. Assess your actual needs. Someday, you may take up exercising, but the treadmill /Stairmaster/Bowflex has been gathering dust for some time.
2. Go through your home, every cabinet, shelf and closet should be cleared. Only put back the things you couldn't live well without.
3. Measure your furniture. ...
4. Assess your new storage areas. ...

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What to consider when downsizing from your current home?

The Ultimate Guide for Downsizing to a Smaller Home or Apartment

• The first step to downsizing: Lighten your load. We all have stuff we can get rid of: Unworn clothes taking up space in the closet, shelves full of old games ...
• Packing it all up: Tips for preparing for the move. Packing is part and parcel of downsizing, and most of us dread it. ...
• An 8-Week Guide to Downsizing and Packing. ...

Should I Sell my House and downsize?

Downsizing is good not only because it allows moving to a more conducive house but it also leaves you with extra cash after buying the small house. Put in mind that downsizing has nothing to do with selling your home; you can buy a small house that fits your demands if you have the money without selling the bigger one. We Buy Houses for Any Reason

What does downsizing your home mean?

Downsizing your home means that you trade your present house for a smaller or less-expensive one. For instance, you might switch over to a condo or townhouse, or you could move to a home similar to yours in a more affordable area of town.

When should you downsize your house?

When do most people downsize their home? ... Your monthly housing expenses have risen above 30% ... Your monthly budget leaves little leftover cash. ... You're feeling overwhelmed with home maintenance. ... Your home no longer fits your needs. ... You're the oldest resident in your neighborhood.More items...•

Is Downsizing Your home a Good Idea?

Done right, downsizing can still be a good idea. You might not just walk away with more money but also simplify your life and reduce your home-maintenance and utility costs for years to come. To reach that happy outcome, you need to steer around the unexpected pitfalls that make downsizing so dicey.

Why do people downsize homes?

Minimized stress: Less responsibility, smaller workload, increased cash flow, and greater flexibility—added together, they all reduce stress. Homeowners who have successfully downsized sometimes appear happier when they're no longer overwhelmed by the demands of a larger home.

Is there a downside to downsizing?

Disadvantage: Lack of Opportunities Downsizing means fewer available positions within a company, and some workers will probably have to be terminated. It also means existing employees who are kept employed will have fewer opportunities to grow and rise to higher positions within the business.

What are the pros and cons of downsizing?

To help you decide if it's the right choice for you, let's go over the pros and cons:Pros: You Can Make Money Selling Your Stuff. ... Con: Purging Can Be Exhausting. ... Pro: Live in a More Desirable Neighborhood. ... Pro: Fewer Costs and Less Upkeep. ... Con: The Costs of Moving. ... Con: Less Space. ... Re-Evaluate What's Important to You.More items...•

Do I pay tax if I downsize my house?

For most people downsizing from a larger, more expensive property to a smaller, less expensive one is exempt from Capital Gains Tax if it is your main residence. That means all the equity that is released by downsizing your home is tax-free and can be used to do what you want with.

How do I prepare to downsize my house?

7 Most Effective Downsizing and Decluttering TipsTake Inventory of Your Belongings. ... Sort Through Items Room-by-Room and Minimize Duplicates. ... Create a Plan to Get Rid of Unwanted Items. ... Go Digital When Possible. ... Make the Most of Your Storage Spaces. ... Measure Furniture and Wait to Buy New Things. ... Give Yourself Plenty of Time.

How do I downsize my property?

How To Downsize Your Home: 10+ Tips To Help You Declutter And SimplifyStart As Soon As Possible And Pace Yourself. ... Focus On One Room At A Time. ... Measure Out Your New Space. ... Consider Your New Lifestyle. ... Set Clear Decluttering Ground Rules. ... Divvy And Offer Up Sentimental Items. ... Sell Or Donate Nonsentimental Items.More items...•

What should I consider before downsizing?

10 Things to Consider When Downsizing to a Smaller HomeAvailable amenities. ... Close proximity to neighbors. ... Home office needs. ... The number of people in your household. ... Your need for personal space. ... Future visitors. ... Your storage needs. ... Your financial goals.More items...•

Why is downsizing so hard?

Anxiety. Downsizing and moving is often accompanied by the anxiety of the unknown. Anxiety when downsizing often comes from the prospect of discarding possessions and deciding which possessions to take with you. When you've spent a great deal of time in one home, a lot of stuff accumulates.

How much should you downsize?

Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It's also a “rule” that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this).

Do I pay tax if I downsize my house?

For most people downsizing from a larger, more expensive property to a smaller, less expensive one is exempt from Capital Gains Tax if it is your main residence. That means all the equity that is released by downsizing your home is tax-free and can be used to do what you want with.

Should seniors downsize?

Downsizing to a smaller home after retirement can have its advantages, such as addressing mobility issues—where smaller and fewer steps are better—and allowing you to travel. Major things to consider before selling include the cost of moving and the potential loss of friend and family relationships.

How much should you downsize?

Typically, mortgage lenders want you to put 20 percent down on a home purchase because it lowers their lending risk. It's also a “rule” that most programs charge mortgage insurance if you put less than 20 percent down (though some loans avoid this).

How do I prepare to downsize my house?

7 Most Effective Downsizing and Decluttering TipsTake Inventory of Your Belongings. ... Sort Through Items Room-by-Room and Minimize Duplicates. ... Create a Plan to Get Rid of Unwanted Items. ... Go Digital When Possible. ... Make the Most of Your Storage Spaces. ... Measure Furniture and Wait to Buy New Things. ... Give Yourself Plenty of Time.

What are the benefits of downsizing a home?

Minimized stress: Less responsibility, smaller workload, increased cash flow, and greater flexibility—added together, they all reduce stress. Homeowners who have successfully downsized sometimes appear happier when they're no longer overwhelmed by the demands of a larger home.

Why do people downsize?

In fact, when asked about their primary reasons for downsizing, 36% of baby boomers, 18% of Gen Xers, and 19% of millennials said they did so because their previous homes were too difficult to maintain. 1 

How does downsizing affect your money?

Downsizing can increase your cash flow, lower your utility bills, and reduce the time you spend on maintenance and upkeep. The downsides to downsizing include having less room for guests and having to get rid of belongings to fit into a smaller space.

What are the disadvantages of downsizing?

Potential Disadvantages of Downsizing 1 Fewer belongings: Moving to a smaller home would probably result in selling, giving away, or throwing out furniture, books, and kitchen supplies. You'd have to sort through and empty out the garage, basement, and attic. Some people form emotional attachments to stuff and can't part with any of it. 2 No room for guests: Hosting a huge holiday dinner might be out of the question in a smaller home. Out-of-town guests might need to stay at a hotel when they come to visit. 3 Space restrictions: Some homeowners report feeling cramped because there is less space in which to maneuver. It's hard to get away from other family members and enjoy private, quiet time because there are fewer rooms to escape to when needed. 4 Less prestigious: Sometimes appearances are more important than comfort levels. For homeowners who place a great deal of importance on how they are perceived by others, a smaller home might not project a coveted image of financial success. 5 Lifestyle changes: Especially for long-term homeowners, trading down means changing a lifestyle, and some people are resistant to change. There is a certain comfort level obtained by staying with what is familiar.

What happens when you move to a smaller house?

Fewer belongings: Moving to a smaller home would probably result in selling, giving away, or throwing out furniture, books, and kitchen supplies. You'd have to sort through and empty out the garage, basement, and attic. Some people form emotional attachments to stuff and can't part with any of it.

Why is it important to reduce square footage?

Typically there is no wasted space, such as vaulted ceilings, in a smaller home. Less square footage decreases the amount of energy expended. Reducing energy is better for the environment and helps to keep your home green. Reduced consumption: If there is no place to put it, you're much less likely to buy it.

Can you host a large holiday dinner in a small home?

No room for guests: Hosting a huge holiday dinner might be out of the question in a smaller home. Out-of-town guests might need to stay at a hotel when they come to visit.

What Does Downsizing Mean?

When you downsize a home, you leave your current home to move into a smaller place. Downsizing might also mean not to downsize property but to downsize costs. For example, if you leave one home to move into another home of similar size but for a cheaper price.

What Are the Benefits of Downsizing?

There are a few benefits of downsizing that all homeowners should know about. If you believe you could benefit from any of these, then it might be time to downsize. Here’s what you need to know!

What to consider when downsizing?

You should be considering not just what will fit physically but what items fit in what you want out of your new space. Downsizing is a chance to reset and revamp – so take advantage of that!

Why do people downsize?

People downsize for many reasons. The most common ones we hear from our clients who downsize are to save money and to get rid of unused space. Downsizing your home can be the right move at any stage of life depending on your goals.

How to downsize a room?

In order to properly downsize, you have to know the size of the space you’re aiming to fit into. Ideally, you’ll know the square footage and shape of each room. This will help you figure out which large furniture pieces you should get rid of before the move. If you don’t have the exact measurements of your new place or don’t have a new place selected yet, focus on decluttering and getting rid of items you know you won’t need. Once you get more specifics, you can dig into those items that you were on the fence about.

What to do when you miss something in your new home?

If you know you’re going to miss the item, but it has no place in your new home, take a photo of it and add any relevant details (where it came from, what it signifies). Create your own “treasure” photobook or work the photos into an album. Some additional ways to memorialize items and memories include:

What to do if things don't fit in your new home?

The first option would be to photograph it and add it to your ‘treasure’ photobook. If that still doesn’t work for you, try and think if there’s a way it could be repurposed or upcycled and incorporated into your new space. For example:

What to do if you don't want to bring items to a new home?

If there are items of high value that you don’t want to bring with you to your new space, consider getting them appraised so they can garner their full value at an auction, be donated (with proper tax deductions) or passed down as an early family legacy gift.

What happens when you start decluttering?

Before you know it, all you’ve done is taken items from one place and moved them to another, instead of determining where they actually belong.

What does it mean to downsize to a smaller home?

Downsizing to a smaller home in a retirement community means living among your peers —if it has a healthy, active homeowners association (HOA). “When you downsize into a retirement community, you can actually raise your happiness by meeting more people from your generation,” notes Swanson.

What does it mean to move into a community that charges HOA fees?

Of course, moving into a community that charges HOA fees means adding to your monthly housing expenses above and beyond any mortgage payment, home insurance, utilities, and property taxes that you’re already paying.

What are the key factors for baby boomers to move?

A survey conducted by Demand Institute found that aging-friendly accessibility was a key factor among baby boomers looking to move, with single-story, low maintenance and disability accessibility topping the list of most desired features.

Do retirees downsize?

Nevertheless, many retirees find it difficult to pull the trigger on downsizing. In fact, 64% of retirees plan to remain in their current home throughout retirement.

Is it hard to downsize?

Choosing to downsize is a difficult decision to make . Choosing the best time to downsize is even trickier. But if you play your cards right, your move into a less-expensive home has the potential to save you money, and make you money, too.

Is 30% housing affordable?

No, we didn’t just pull that percentage out of a hat— the U.S. government has been using 30% as the standard for housing affordability since the United States National Housing Act of 1937. Since that time, any household paying above 30% of their income on housing is considered financially burdened.

Can a family home be a mobility problem?

Unless you planned ahead for aging in place when you picked out your family home, chances are it has architectural features that may pose a mobility problem in retirement.

Why is it important to downsize your home?

Here are the most popular reasons for downsizing your home: Combating debt. Turbo-charging your retirement fund. Paying off your mortgage instantly.

How to organize your home when downsizing?

Good organization is key to any move but it will prove especially useful when you’re downsizing your home. So take some time to look through your garage, closets, and spare rooms for anything that’s collecting dust. That model rocket you bought at the space fair eight years ago might be awesome but do you really want to keep holding on to it? Start by rounding up these sorts of belongings and then work your way through old clothes, toys, old appliances, etc., and separate them into three piles: keep, maybe, and donate.

How to avoid stress when downsizing?

Avoid getting too stressed out by the process by remembering to take it one step at a time. Set a timeline for yourself and create a moving schedule accordingly, rather than attempting to tackle everything all at once. By creating a downsizing schedule and a moving checklist, you’ll stay better organized throughout this process while also reducing stress.

What is a storage unit?

In addition to saving important documents that you don’t require frequent access to, a storage unit is a great option for saving sentimental items like scrapbooks or seasonal items like winter coats. Whether you’re downsizing temporarily or for the long haul, renting a storage unit is a great option for those items that you don’t have space for but just can’t bring yourself to get rid of.

What rooms do you use most in your home?

When you stop to think about which rooms you use the most in your home, it’s probably pretty simple: the living room, kitchen, a bedroom, and a bathroom. If you’re not using your dining room, den, and third or fourth bedroom, why even have them at all? By thinking about what rooms you currently do and do not use, you can simplify your search for a downsized home. The same tactic can be applied to your yard. If you find yourself spending little of your free time enjoying your yard — rather just maintaining it — then consider looking for a new home either with a smaller yard or without one.

Can you move furniture on a two story house?

While your two-story home is more than capable of housing all of your furniture, your new home won’t prove quite so spacious. So before you start loading your beds or sectional sofas onto a moving truck, keep the limitations of your new home in mind. Also, furniture that is too large for a room will only make a room look smaller, so you may want to consider getting a new couch that will truly work in your new space.

Can you save money on utilities when downsizing?

Although you’ll be saving money on your mortgage and utilities by downsizing, that doesn’t mean you can throw financial caution to the wind. When you’re house shopping, make sure that the home you’re considering either doesn’t require extensive repairs or maintenance, or at least make sure that you can comfortably afford them.

What are the benefits of downsizing your home?

Benefit 2: Reduced Effort on Upkeep. Not only are you downsizing your home to save money, but you are also saving time and energy you usually invest in maintaining your large home. No longer will you spend hours cleaning rooms you barely use and doing tedious yard work.

WHAT IS THE DOWNSIDE TO DOWNSIZING?

The main disadvantage downsizing could pose is discontent if the timing is not right. Heavy emotional attachment to things, stressful life events, financial burdens, and other factors may indicate right now is not the best time to be thinking about making a lifestyle overhaul. It can feel overwhelming. Here are a few downsides to downsizing for you to consider.

HOW CAN YOU KNOW IF IT’S TIME FOR YOU TO DOWNSIZE?

Since it is primarily a lifestyle decision, determining when you should downsize your home is all about evaluating how your space complements the lifestyle you desire for yourself.

What are the challenges of decluttering?

Decluttering difficulties: It can be challenging to let go of family heirlooms that no longer fit or get rid of a closet full of clothing you used to love wearing. It can be heart-wrenching to finally sell that collection you acquired from years of travelling., or throw out the small knickknacks you or a loved one has grown accustomed to hoarding.

Why do people downsize?

One of the primary reasons people consider home downsizing is to save money. Smaller homes ensure a smaller mortgage, lower utility costs, less maintenance expense, and lower property insurance. If you are selling your old home, you can use the profits to buy your new place in cash, eliminating your mortgage payment entirely .

Why do empty nesters need a smaller home?

Empty-nesters may consider a smaller home to suit their child-free routines. Retirees may want to spend less time and money maintaining a larger home. Individuals on whom age is taking its toll — and their families — may find themselves searching for extra assistance in a care facility.

How to pack up a house?

Pack up the house: Pack items into well-labeled boxes, and keep a running inventory list of what the boxes contain and the rooms they belong in.

What is the hardest thing about downsizing?

One of the hardest things about downsizing? Not knowing what to expect. If you're worried about how the process may affect you, discuss it with some friends who've done the same in the past. While it may seem like a scary prospect at first, when you hear others tell you how much happier they are in a smaller space, you might find yourself inspired to follow their lead.

How to downsize a collection?

If you're a collector looking to downsize, invest in a display case that fits your new space, limit your collections to what fits inside of it, and donate the rest. In doing so, you'll avoid finding your new home littered with tchotchkes that you eventually have to cull.

How to keep your new home organized?

Looking to keep your new home organized when you move in? Figure out what storage containers will fit in your cabinets and closets, and only allow yourself to fill up those boxes. This will ensure that you're not carrying clutter into your new home.

When to think big about going small?

Think big about going small. By Sarah Crow. June 4, 2019. By Sarah Crow. June 4, 2019. While that sprawling house you bought as your family grew may have suited you at one point, many people find themselves with too much space on their hands by the time they hit middle age.

Is it easier to move to a smaller space?

But for many, getting the ball rolling on a move to a smaller space is easier said than done, especially because of all the things that can't come with you. If you find yourself saddled with too much square footage—and too much stuff—read on to discover some easy ways to effortlessly downsize. 1.

Is it expensive to rent out your house?

Moving is expensive, but renting out your current home while you're in the process of getting your new one in order can help offset some of the financial burden. If you're packing things up room by room, rent out a mostly-emptied bedroom on weekends while you're setting up your new space.

Is downsizing financially viable?

While downsizing may seem like the natural next step in life once your kids have moved out and you're eager to have less space to keep clean, that doesn't necessarily mean it's going to be a financially viable decision.

1. Trade space for a location that checks all your boxes

Have your kids—and perhaps more importantly, your grandkids—settled down a few states away? Maybe you always dreamed of living in the city, or near the ocean, but raising kids kept you in a more suburban area?

2. Think proactively about comfortably aging in place and extending independent living

Jon Bowling, a relocation specialist and top real estate agent in Cincinnati, Ohio, who sells 74% more homes than his peers, sees a lot of what he calls “resizing” in his area: homeowners who don’t necessarily want to cut back on space, but need to sell their home and find a property that better suits their current needs in layout and accessibility..

3. Untether yourself from the burden of too much stuff

Homeowners preparing to downsize may have been in their current home for decades—which could mean a lot of accumulated possessions. Imagine how much better you’ll feel after a major purge.

4. Design your new abode around your most treasured possessions

Think of downsizing as an opportunity to showcase your favorite items in all their glory, without the distractions of all that other clutter. Prominently featuring your most prized possessions eases the transition and helps your new house feel like home.

5. Pick a place with amenities that match your hobbies and interests

Independent living communities are no longer just for the avid golfer.

6. Invest in creative storage options to comfortably conceal all your necessities

With a little creativity, the right configurations, and storage solutions you never thought of, you can maximize your workable space, even with less square footage.

7. Use your savings on travel and experiences, rather than material items

Let’s say you used the proceeds from the sale of your current home to buy a smaller house with cash, and now you no longer have a mortgage. Think about what you could do with that extra thousand-plus dollars every month, not to mention the money in your pocket from selling off all that closet clutter.

Potential Advantages of Downsizing

Potential Disadvantages of Downsizing

Market Timing

Buy Or Sell First?