Most people think of downsizing as something you do in retirement. The kids are grown, the nest is empty and you have all this space just gathering dust or taking up your free time with maintenance and upkeep. So, you sell the large family home to moving to a smaller, retirement-style home, free up some cash and have more to spend on leisure.
To many, downsizing is a negative: smaller house, less space, cutting back. But, downsizing can be an important step in "upsizing" your life. You just have to determine what "downsizing" means to you.
Smaller Space, Bigger Life
Moving to a smaller space (as in "fewer square feet") doesn't have to mean that you have less living space. Many family homes have large square-footage cut up into little spaces to house multiple family members. When downsizing from a large family home, look for a layout that maximizes the living space so that you don't feel closed in. That might mean an open floor plan, more windows, adding outdoor living space, foregoing formal spaces or even choosing a wall-less loft.
An important idea to keep in mind is that downsizing shouldn't mean moving into a smaller version of what you already have. Moving from a four-bedroom/three-bath 5000 square-foot home into a four-bedroom/three-bath 1800 square-foot home just feels cramped and crowded. Moving your living area, home office and master bedroom into an 1800 square-foot two bedroom, open floor plan, however, can seem like a mansion. In fact, some people find that fewer rooms mean more living area to enjoy.
Freed-Up Cash? Or, Freed-Up Life?
Okay, yes, for some people, the purpose of downsizing is to free up cash for other things. If however, freeing up cash isn't your aim—for example, if you need to reinvest all the money from the sale of your family-sized home as part of your financial plan—downsizing into an upscale high-rise condominium or townhome in your favorite urban area can massively upgrade your lifestyle.
Think of it … spend your evening at the theatre, dining out or entertaining friends at the rooftop pool. Just being able to lock the door and head to the airport for some long-anticipated trip without having to arrange for a house-sitter, lawn-care and yard work, or the myriad other requirements of property frees you to travel on a whim, be spontaneous, grab a good deal on a weekend cruise or visit the kids and grandkids as often as you like.
Even if you can't afford a luxury place, where you locate your new home can free up your life from the tedious efforts of maintaining a larger property. If having freedom to do other things is important to your new life goals, make certain your real estate professional knows: lifestyle options may exist that you've never thought of.
Preparing to Downsize
Whether by choice or necessity, moving from a larger space to a smaller one requires devising a plan.
Prioritize: As the lyrics to "The Gambler" go, "Know when to hold 'em, know when to fold 'em." Determining the most important items to keep and what to give up means examining both your logical brain and your feelings. Logic might dictate that you massively pare down your belongings, but your heart knows you'll regret getting rid of your grandmother's cedar chest. Experts suggest separating your belongings into four or five categories:
- Trash — of course, getting rid of trash includes broken items that can't be repaired or items too stained or dirty to be given away.
- Use/Keep — in this category, place items that you would just have to replace in your new home (appliances, basic furnishings, tools). Just don't keep extras of these items. In a smaller space, you probably only need one.
- Love — some things just need to be kept in the family. This category might mean keeping the item or finding a family member that wants to enjoy it for a while. Sharing heirlooms can bring a family closer together.
- Sell — E-bay, craigslist, yard-sales … the list for making money from your belongings goes long. If you don't want to handle it yourself, you can even hire a service to do it for you.
- Give — Charities always appreciate clean, useful items. Just make sure to separate trash from the items you're giving.
If you've thought about downsizing, RK can help you determine the best options for your lifestyle and goals.
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