When you have children, there will eventually come a time in your life when they leave home and you find yourself plonked in the “empty nesters” category. This is a time when many retirees consider downsizing, and it usually makes a lot of sense to do so. A smaller home is easier to maintain, cheaper to run, and can often mean an increase in luxury.
But before you take the leap and put your house on the market, there are some important considerations you need to be aware of.
- Think about all your options
Do you want to move to a smaller house with a garden in a quiet area, an apartment in the city, an over 55s lifestyle community or even a retirement village? Do your research into all the different types of properties available and the associated costs that come with them.
Also, think about whether or not this will be the last time you move in your life? If so, you need to think long-term and make sure the accommodation you choose will still suit you in the years to come.
- Consider your lifestyle
While some people downsize for financial reasons, others do so as a lifestyle choice. Moving to a smaller luxury apartment in the inner city might be more expensive but you’ll be closer to the action, and still won’t have the maintenance worries that come with a large house.
Downsizing can lead to an improved quality of living, so consider the impact that moving will have on your lifestyle. You may find your 4-bedroom brick house that was built in the 80s is worth the same as a brand new luxury 2-bedroom apartment.
Do you want to maintain your active, sociable lifestyle, or are you looking for less stress and more quiet time? The lifestyle you want will determine the type of living arrangements you choose.
- Look at the financial implications
While selling a large home can free up some equity and capital, it can also affect other finances such as the pension, tax and entitlements. If you sell your current home and buy a new home, it’s possible you’ll still have some cash in reserve. While that might sound like a wonderful thing, the extra cash might affect your entitlements.
It’s important to consider the financial implications, because it can mean a decrease in the amount of money you receive. Crunch your numbers with your Financial Adviser before making any decisions.
- Think about a Granny Flat
A Granny Flat (more commonly known as a Lifestyle Dwelling now!) is a fabulous option to consider. They are relatively inexpensive to build, allow you to live independently and give you the security and peace of mind that a family member is close by if you need them.
For this option you obviously need family members willing to build a lifestyle dwelling for you and of course they need enough space available on their block. But it’s something worth considering.
Whatever you choose to do make sure you look at all your options, consult your Financial Adviser and above all, be sure to enjoy yourself!
If you’d like some advice on downsizing (or ways to enjoy yourself!) please call us on 02 9241 2575.