Guest Article by Julia Weaver
As we grow older, our needs and capabilities change, and not all homes are designed to support this change along with us. It’s common to upsize your home when your household is growing – whether to accommodate children, pets, or simply because you need an extra room for a home office. But what once was the perfect home, may now be too hard to manage and maintain in your golden years.
There are countless benefits of downsizing your home, and it’s a wonderful way to open the door to the next stage of your life. But, making the decision to downsize can be hard, and leaving a home filled with cherished memories can bring heartache. So, when is the right time to downsize? If owning your current home has brought more stress and worry than it has joy and comfort in recent years, the time may be now. Here are 8 signs it’s time to put your house on the market and downsize.
1) Your monthly housing expenses have exceeded 30%
A general rule of thumb is to spend around 30% of your monthly budget on housing expenses. This includes your mortgage payment, utilities, maintenance costs, homeowners insurance, and property taxes. In fact, any household that spends above 30% is considered financially burdened. Stressing over finances can have an impact on your mental, emotional, and physical health, and having a little extra money saved up will help you be prepared in case any unplanned expenses or health issues arise.
Downsizing your home is a great way to lower monthly housing expenses because typically, a smaller home means smaller monthly housing expenses. Before you begin the home buying and selling process, be sure to calculate how much house you can afford on a fixed income.
2) You have little leftover once bills are paid
The definition of retirement has changed drastically over the years. Now more than ever before, retirees are maintaining an active lifestyle that includes hobbies, exercise, and continued learning – and these all cost a bit of money. So how would you like to spend your time? Perhaps it’s joining a gym, taking painting classes, or taking a few college courses. If your monthly housing expenses are so high that you can't enjoy your hobbies or activities, now may be the perfect time to downsize to free up some cash so you can spend it the way you want.
3) Maintaining your home is becoming difficult
Our homes are filled with precious memories that we hold dear. The wall where you recorded your grandchildren’s heights, to the living room where your daughter first learned the piano. Our homes are reminders of the love and laughter we’ve shared with friends and family, and this leads many to remain in their homes longer than is wise for their health and financial stability.
Limited mobility can prevent you from being able to perform general maintenance around the house, like yard work and regular cleaning. No matter your age, there will always be household chores that need to be done. But cleaning the gutters, vacuuming a two-story home, or mowing the lawn and trimming the shrubs can become more difficult as you get older. One of the many benefits of downsizing your home is you can choose a property where you longer need to worry about these chores. If you’ve reached the stage where these tasks seem impossible, it’s time to go smaller. And it’s better to make this decision sooner, rather than later. If household chores begin to pile up and if they impact the condition of your home, you may see a decrease in property value when it comes time to sell.
4) Your home has features that make aging in place difficult
If you’ve gained mobility restrictions as you’ve grown older, you probably made home improvements and modifications for safe and comfortable living. You’ve installed handrails, upgraded the lighting, and replaced your hard flooring for carpet. But depending on your layout, there may be some home features you’re unable to modify that still pose a threat to your safety and make aging in place difficult. Features like several flights of stairs, narrow doorways, or high-maintenance landscaping can all be safety hazards. If these home features have become obstacles for you, then now is the right time to downsize to a safer floor plan. A home designed for optimal accessibility, convenience, and safety is imperative to avoid falls and serious injuries.
When considering downsizing your home, it’s also important to consider the weather in your area as snow and ice can be dangerous for someone at any age.
5) Your neighborhood no longer fits your lifestyle
If you’ve lived in your current home for countless years, you probably opted for a neighborhood that suited your lifestyle at that point in time. Maybe you chose a suburban neighborhood to escape city life. Or maybe you moved into a townhouse in the bustling city for an easier commute to work. These neighborhoods may have been ideal for your previous situation, but now they may no longer fit your needs.
You may find downsizing to a different neighborhood is what you need to fit your current lifestyle. Downsizing your home to a smaller one can reduce the amount of upkeep and free up your time for leisure activities, getting more rest, and spending time with family and friends.
6) You want to turn home equity into retirement income
For most homeowners, equity is one of the most valuable assets, but sometimes your home may be too expensive to maintain. If your plan is to rely on home equity for income in retirement years, such as using a reverse mortgage, now may be the right time to downsize. Property taxes and maintenance costs may even be lower. Work with a real estate agent so you can sell your current home for the most money possible.
7) You have the option to live anywhere
The beauty of retirement is that you’re no longer tied to one location and can choose to live wherever your heart desires. This gives you the opportunity to look all across the US housing market for neighborhoods with the lowest property taxes, utilities, sales taxes, and more. So, if you’re wanting to sell your home in Vancouver, BC, and escape to sunny Sacramento, CA, or if you’re looking to be closer to family, the world is now your oyster.
8) Consider downsizing your home when several rooms go unused
It may feel like just yesterday when three bathrooms didn’t feel like enough, or when your grandchildren’s toys somehow managed to take over the entire house. At those times, you probably longed for a larger house to control the chaos. But, if any of the rooms that were once used are now rarely opened, it doesn’t make sense to pay to heat, cool, and light them. Saving money on utilities and property taxes are just a couple more reasons to think about downsizing your home.
Types of housing options for downsizing your home
So, if you’ve decided that now is the right time to downsize, it’s important to consider a number of factors while choosing between housing options. Mobility and ability restrictions, caregiving needs, location, and budget all play a large role. When you’re downsizing your home, it’s important to find a place that meets both your current needs as well as your future ones. Here are four main housing options to consider when downsizing your home.
1. Buy or rent a single-family house or one-story condo.
With home modifications applied as necessary, like bathroom grab bars or adding anti-slip mats throughout the home, you’ll be able to live independently for longer. If you’re still relatively independent or can get the level of help you need, perhaps meal delivery, cleaning services, or with the help of an in-home caregiver, staying at home can be a good option.
2. Move in with a loved one.
Being close to children and grandchildren not only creates a stronger bond with them, but it can also give you peace of mind in case any health concerns come up. Want more alone time? Consider adding a tiny home to the backyard.
3. Move into an independent living community.
This includes senior housing, retirement communities, senior apartments, and active adult communities. The homes can be single-family houses, townhouses, apartments, or condos. They typically provide meal prep, transportation, housekeeping or maintenance, and health-related services. The community will often have recreational centers or clubhouses to give you the opportunity to connect with others and participate in community activities. You’re surrounded by people of similar age and interests and can enjoy the amenities and activities together. Since independent living facilities are aimed at older adults who need little or no assistance with activities of daily living, most do not offer medical care or nursing staff. You can, however, hire in-home help separately as needed.
4. Move into an assisted living community.
This is typically for seniors who can live somewhat independently, but require assistance for some daily tasks. Typically, the staff is available 24 hours a day, and meal prep, medication management, bathing, dressing, housekeeping, and transportation are all available. They also offer social groups and recreational activities.
In-home care services are also offered at various levels depending on the situation. In-home caregivers can provide help with day-to-day activities like cooking, grooming, or shopping, while also making sure you’re safe.
There are many factors to take into account when answering the question- when is the right time to downsize? But keeping these 8 signs in mind can help you come to a decision that moves you into the next stage of your life with ease.
Redfin does not provide health, legal, financial, or tax advice. This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional.