“My husband and I are about to reach a big milestone together. Our youngest child will soon graduate and we’ll be “empty nesters”. Once our son goes off to college, it will be just the two of us, alone in a home that’s more than three times the size of the first house we bought nearly twenty-five years ago. Although we have moved few times over the years, always in need of a bigger place to fit our growing family. Now we are considering moving again… for the first time not to grow, but to downsize. So where do we start?”
Does this sound familiar?
Are you an “Empty Nester” who needs a home for the future?
Is it time to downsize or to move into another home more suitable for your glorious retirement years?
Like thousands of others, you may be discovering that after years of non-stop child traffic in and out of your doors, toys on the floor, music floating throughout, suddenly all you can hear is the quiet hum of the refrigerator.
Your rooms are filled with pictures and memories of this wonderful time of your life, but there are many empty rooms gathering dust now that your children have moved on. The freer years ahead are exciting ones to look forward to, and it’s time for you to move on as well.
If you find yourself in this situation, you’re in vast and good company. And what that means is that there are many wonderful opportunities for you to create this new downsize chapter in your life . . . if you know what it takes to get the most out of the equity you’ve built up in your current home.
The benefits of a downsize are obvious.
A smaller home usually means a smaller or shorter mortgage, less taxes, and cheaper utilities. Smaller homes are also cheaper and easier to clean and maintain. Then with the money you save from the downsize, you can start working on that “bucket list.”
If this is you, the time to act is now. Waiting too long to downsize is a common financial mistake empty nesters make. Many of them could have downsized years earlier but waited because of sentimental or nostalgia reasons, or simply not wanting to change.
From a financial standpoint, owning a big, expensive home is generally not the best investment. The average home grows in value by only 3-4% per year at best and you can typically earn a better rate of return through balanced investments, so it just makes sense to downsize and get out of that big home sooner rather than later.
Still, before you decide to downsize you should plan carefully and weigh costs and benefits. Decisions you make on where to move to save money could end up costing you more than you thought. Ask yourself these questions…..
How much space do you need? If your spare room only gets used three times a year, it’s probably cheaper to put your guests up at a hotel then pay the mortgage on a room that rarely gets used. Of course, a smaller space will come with less room for your stuff (see below), but if you’ve tied up a chunk of home equity to pay to store your things, well that might not be the best use of your money.
What else could you spend the money on? It’s no secret that most Canadians are relying on their home to fund part of their retirement. If you sold your big home and moved to something smaller, what opportunities and doors would that open for you? Travel? Earlier retirement?
Be honest: How often will your kids really visit? A lot of people considering downsizing are doing so because they’re suddenly empty nesters. The kids are (finally) on their own and downsizing to a smaller place is a guaranteed way to make sure they don’t move back in. While I’m not suggesting condo living would be a good fit for you, it’s worth keeping in mind that most condos will have party rooms that can host your 20-person Thanksgiving Day dinner and many have guest suites for overnight guests.
Neighbourhood Change One of the most exciting (and scary) parts about downsizing is getting the opportunity to live in a new neighbourhood. If you’re currently in the suburbs, imagine being able to walk to cafes, restaurants, and parks?
Lifestyle. The biggest adjustment to a downsize is your lifestyle – you’ll likely be giving up backyard BBQ’s and hosting big family reunions, but you’ll also gain time and cold hard cash.
What kind of life do you want to live? Are you ready for condo living? Many homeowners are wary of paying condo fees, but the truth is that it’s usually cheaper to pay condo fees than to maintain a home in Halifax. From dealing with regular maintenance items like cleaning gutters and maintaining the furnace, to big dollar money spent fixing a leaking roof or basement, the costs can add up fast. Condo fees are also predictable (which is nice in retirement). And how nice would it be to simply make these problems someone else’s?
These trade-offs can be complicated so it’s important to do your homework and talk to an experienced real estate professional about your concerns before you downsize.
The hardest thing about the downsize process is usually getting rid of all the “stuff” you have accumulated over the years.
Whether you are anticipating the empty nest or are in the empty nest, there are questions that come up for you. In order to fill the void many people start to ask themselves “What do I do with this big house, and all this stuff?”
For empty nesters, making the decision to downsize from that 3,500 sq. ft. two-storey home in the suburbs is often an appealing idea. A large home usually means large heating and cooling bills, a large yard to mow and weed, lots of bathrooms to clean and increasing property taxes. Often the proceeds from the sale of your family home will enable you to buy a smaller home with money left over, but even if you don’t end up with a sizeable profit, you should save a lot in reduced energy and maintenance costs.
What to do with all your “stuff” as you downsize? You know it won’t fit in a smaller place and you may want to buy new furniture anyway to suit the style of your new home. Begin the downsize as early as possible, at least six months before you plan to put your home on the market.
Here is a step-by-step list to help you downsize your belongings:
- Consider the likely size and style of your new, smaller home. If necessary, measure your furniture and determine what will fit. Also determine what will fit in style-wise.
- Develop a list of resources. This list might include charities, consignment stores, movers, storage facilities. Contact them and choose the ones you want to use.
- Compare the cost of moving or shipping your furniture, appliances, mattresses, etc. with the cost of replacing them at your new location.
- Make two lists: one list of the pieces you want to keep when you downsize and one list of those you plan to get rid of.
- Contact family members and/or friends to see if they want any of the items you do not want to take with you and, if so, how and when they want to come and pick the items up.
- When in doubt, throw it out. One of the easiest ways to be comfortable in your smaller space is by getting rid of all of that stuff you’ve been living with and not using: old magazines, paperwork from 20 years ago, old laptops, broken furniture, books you never look at anymore, etc. You’ll also enjoy your new space more if you pare down the number of knick-knacks, framed photos, and trinkets.
- Donate, donate, donate. If you aren’t using something, the chances are that someone else will both appreciate and use it. Consider donating kitchen appliances and gadgets, clothes you’ll never fit back into, sports equipment from before you had problems with your knees, etc.
- Develop a step-by-step plan. This could be room by room or type of item (e.g. furniture, clothing, memorabilia, etc.).
- Follow your downsize plan systematically. Include your spouse or partner, if possible, so one of you can keep the other on track. (It’s easy to get distracted with old photos and memorabilia.)
- Paperwork You may need to access up to 7 years of tax history, so make sure important legal and tax documents can be easily retrieved.
- Memories are just that – memories. While it’s nice to have family heirlooms and keep items that are personally significant to you, you probably don’t need every greeting card or concert ticket stub. Make a point of moving just the important stuff with you (they’ll be more important to you that way too).The less you have to move, the easier your downsize move will be!
Deciding to downsize is a big decision. We’ve helped people through this transition many times and would be happy to talk to you about your options.
From finding you the perfect downsize “right sized” home for you, whether it be a one-storey home on a quiet street, an apartment close to amenities or a maintenance free town home, and helping you to sell your “family” home is our specialty.
I’d be thrilled to help answer any of your questions about the benefits of a downsize move and how we go about selling your Halifax home in the time frame that works best for you.
For more information about selling your Halifax home, you may find these blog posts helpful during this emotional process.
Downsize tips for making the process easier: