Many retirees are finding they don’t need the sprawling family home anymore. When the children are grown and independent, those extra bedrooms sit empty while you’re still paying to heat and cool them. The spacious living room can seem overwhelming when only a corner of it gets used these days. Most importantly, the equity that’s been gained over the years is tied up in the home, instead of cash in your pocket.
Advantages of downsizing include:
A simpler lifestyle. Smaller closets, cozier rooms, and a smaller footprint mean a streamlined approach to life. If there is no place to put it, you’re less likely to buy it.
Lower utilities. It costs less to heat and cool a smaller home. Chances are, your smaller home is newer than your family home which means it might be better insulated with energy-saving windows and other utility-friendly advancements.
Increased cash flow. Many retirees sell their large, family home and are able to buy a smaller home and pocket the difference. It depends on several things, including the real estate market in your area, the availability of smaller homes and good timing.
Reduced stress. Large family homes usually come with a family-sized yard; this can be difficult to maintain during retirement. There are also the usual repairs needed on many older homes; for example, more bathrooms mean more plumbing repairs. Downsizing from four bathrooms to two means the chances of repairs are cut in half. The reduced workload translates into less stress overall.
While there are many good reasons to downsize, there are also concerns that should be addressed. Think carefully about these potential pitfalls:
No room for guests. Hosting the holidays might be difficult if the living areas are small. Overnight guests will need to stay in a hotel if there are no spare bedrooms.
Space restrictions. While some may long for a cozy home, others might feel cramped with the lack of space. If a couple prefers to spend time separately, perhaps reading or working on a hobby, it can be difficult to carve out personal space in a smaller home.
Less prestigious. A spacious home might be a status symbol. A reduced-sized home could seem like a step down to some observers. To some people, appearances are more important than comfort levels; for these, downsizing might not be a good choice.
These pros and cons should be weighed carefully. There are no right or wrong answers in situations like this, it depends on personal preference and financial situations. It’s a good idea to consider the options and consult with a qualified realtor for expert advice.