The decision to downsize your property as you get older can be one fraught with mixed feelings.
On the one hand, your home feels empty now the kids have gone and cleaning and maintenance has become more difficult, but on the other, it is the place you have all your memories, and moving to a smaller house can feel like an admission you can no longer manage.
There are considerable benefits to downsizing, especially if you are retired and relying on your superannuation for cost of living expenses. Your energy bills and maintenance should be much lower. You may also decide to move closer to loved ones, either to get some help from them or to spoil the grand kids in the way only grandparents can.
Alternatively, you may find yourself widowed, and craving company, and often a move can help you get a new start, and begin an exciting new chapter.
Once you have decided to downsize, there are a few considerations you need to make. To help get you started, we have listed a seven-step guide to downsizing:
Where are you planning to move to? Do you want to stay in the area or move somewhere else, such as closer to family or friends, or a tree change or sea change or even an overseas change?
2. What is your financial situation?
If you are retired, you need to consider what money you have to live on. If it is a pension or superannuation, would the proceeds from a sale be helpful for your ongoing cost of living? Are you mortgage free and potentially in a position to purchase elsewhere and rent out the family home? When considering your current and future income, it is advisable to seek the advice of a professional and impartial financial adviser, who can let you know if there are any tax implications or other considerations (often retirement villages and assisted living facilities have guidelines around owning other property).
3. What kind of property do you want?
Do you want a small freestanding home (consider the maintenance required), a townhouse for a sense of community, an over 55s community to meet like-minded friends, or assisted living, where you may need the security of knowing there’s help if you need it.
Coming up with the answer to this question means taking a good look at your current needs and a taking a bit of a guess at what your future needs may be. Consider any health issues you may have now, which are likely to deteriorate over time, as well as your mobility requirements. Clearly, 30 steps up to a hilltop residence with a stunning beach view might not be practical if you need a cane or have a bad back.
4. Get a valuation of your current property
Don’t rely on friends telling you the massive sums they made on their house sale, without doing your research. You can look at recent sold prices on leading property portals such as realestate.com.au or domain.com.au or purchase a valuation report from RPData or similar. You can also get real estate agents or professional valuers to give you an indication (you are not locked into selling with any agents by doing this).
No doubt there’s years’ worth of memories, potentially a lifetime, stored away in your home. If you are downsizing, it stands to reason it can’t all come with you. If you are selling your home or renting it out, you need to declutter to get it looking its best for sale/rental as well.
When deciding what to keep and what to toss, consider the following:
Do I need it?
Do I want it?
Is it of sentimental value?
Do I use it regularly?
Do have more than one of these?
There’s no point keeping the ugly salad bowl Aunt Mabel gave you in 1983 if it has sat in your cupboard since then. Toss it out! Be ruthless.
If you have bulky sentimental items, photograph them for the memories, but consider passing them on to a family member who will treasure them as much as you did. Offer as much as possible to family members and loved ones. Sell valuable possessions on the internet, or antique shops and give away serviceable items, that you can’t sell, to charity shops.
Decluttering can be an emotional time, so use the help of loved ones to keep you focussed and give you a hug and cuppa if you need it.
6. Decide how you are going to sell
Consider how you will sell your home. Will you list it with an agent? It is worth asking them about their commissions, as listing with an agent can take around 3 percent of the sale price in commissions out of your pocket and into theirs. Often they also charge you for marketing. On a $600,000 home, this could be as much as $20,000. That amount could really make a positive impact on your lifestyle over time. It is not difficult to sell your own home, and buyMyplace offers fixed price campaigns from complete DIY sales to fully supported, including photography and marketing and even negotiation if required. Best of all, you don't pay a percentage in commission. The price is fixed, regardless of your home's value.
7. Start Looking for your new home
Now you have all your ducks in a row when it comes to downsizing - a neat decluttered home, and an idea of what you want in your new property, you can get excited and start searching for your new place. If you are moving to a whole new area, or even to a very different style of home to your current place (such as an apartment), be sure to look at recent sales in your chosen area, or even purchase a suburb profile from RPData.
A suburb profile will indicate current average property prices, and will also provide demographic information such as the age and interests of people in the area which will ensure you are moving to an area of like-minded people.