Downsizing for Retirement: 6 Reasons to Consider in Today's Market

Downsizing for Retirement: 6 Reasons to Consider in Today's Market

  • Hodge & Kittrell
  • 07/13/23

Congratulations on your recent or impending retirement! Now that you have more free time, evaluating your living situation and seeing if downsizing is right for you is essential. Downsizing refers to relocating to a smaller, more efficient home. There are multiple reasons to consider downsizing for retirement, including changes in space needs, a desire for less maintenance, and changing travel habits. Additionally, downsizing can help you declutter your life and prioritize what truly matters. However, it is crucial to evaluate all factors before you downsize, such as emotional attachment to your current home and community.

1: What are you willing to part with to accommodate a smaller space?

The first question you should consider when debating downsizing your current home is how much space you actually need for your belongings. Are there mementos and furniture you are willing to donate or sell? How often do you use the items you own? If you haven't touched something in a year or more, you may be more willing to let it go. As you review your belongings and note what you cannot bear to let go, you can better estimate how much space you need. Also consider where you spend most of your time in your home on a day to basis. That is a helpful way of considering how many rooms do you actually use. You may be ready to downsize if you can whittle down your belongings to fit in fewer rooms.

2: How often are you entertaining guests?

The second reason for downsizing you should consider is how often you entertain guests. Do you often host large family dinners? Game nights? Other events necessitating you to have guest rooms or an ample space for hosting multiple people regularly? Do you have children and grandchildren who frequently visit and stay with you? You may only be ready to downsize if you are willing to stop serving as a host. If hosting is important to you, but you want a smaller space, consult a Raleigh realtor to get an idea of the properties that suit your needs.

3: How much is basic home maintenance costing you?

Next, you should review how much you've been spending on home upkeep and maintenance. Are you able to easily clean your home yourself, or have you hired a service to handle it? How much time, energy, and funding are you sinking into your yard and home's exterior facade to keep it looking nice year after year? When did you last have to cover a significant upgrade, like the roof, flooring, or kitchen remodel? When were the appliances last replaced, and how often have you had to replace each one? As you add up the expenses, you may find you've been spending far more than you realized on keeping your home for sale near Raleigh NC in good working order. If you feel some funds could be better used for other things, such as travel, downsizing may be the answer.

4: Is your current home accessibility friendly for an aging homeowner?

Another consideration in favor of downsizing is how accessibility friendly your current home is for an aging homeowner. While it may not be applicable now or in the foreseeable future, it is still worth reviewing as you consider listing your property among single family homes for sale in Raleigh NC. Are there any necessary steps to enter your home? Are there any bedrooms on the first level or are they all upstairs? Is your bathroom equipped with a walk-in shower or tub for more effortless mobility? Can the rooms be easily renovated if you need to accommodate a medical device down the road? While you may never need to add wider doorways or a stair lift chair, evaluating if your home could accommodate such changes if necessary may push you toward downsizing to a house with fewer stairs to climb, less square footage to clean, and easier accessibility.

5: Do you plan to travel extensively in retirement?

If you plan to travel frequently now that you won't be working, you may no longer need a large home. If you spend the majority of your time away from home, downsizing can help you repurpose savings on utilities and other home costs as funds for your vacations to enjoy tours, delicious food, and exciting entertainment. If you plan to spend most of your time at home, you may want a larger space than if you seek a home base between trips, so downsizing may not be suitable for you. Alternatively, you may pursue a middle ground of a smaller property than your current one, but not so small that you only use it to rest between trips. For help nailing down what type of property may be most suitable for your needs, consult one of the best real estate agents in Raleigh NC.

6: Do you have a solid estimate of potential profit and costs?

Finally, have you prepared a solid estimate of your home's potential profit and the costs of sale? Before you decide to downsize, you should have your home inspected to ensure it is up to the current building code and have it appraised so you know its fair market value. You should also consult a local real estate expert, like the agents with Hodge & Kittrell Sotheby’s International Realty, for a comparative market analysis to give you a clear idea of what your home is worth if you sell it as is. They can also recommend upgrades that may improve your sale price and time on the market.

As you gather your estimates, remember to factor in the down payment on the smaller property, closing costs on your current home and the new home, agent commission, and capital gains taxes on the sale. To craft a solid budget estimate, you'll need a clear idea of the type of property you plan to buy, whether you are looking for condos or new single family homes for sale in Raleigh NC. For assistance, consult a financial advisor who can provide detailed insight based on your financial goals and retirement timeline.

Downsizing for retirement is a big decision, but one that can be beneficial to your lifestyle and financial goals. Only you know if a smaller space will be the best fit for your long term goals. If downsizing sounds like it might fit into your retirement plan, contact one of the experienced agents at Hodge & Kittrell Sotheby’s International Realty for expert guidance.

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