Why should I downsize my house?
Thinking about downsizing, but not sure what your options are, or if it's a good idea in the first place? The benefits might surprise you! Are you tired of walking around your home and feeling like it's just too big, or too much to look after by yourself? Even if you've got a partner, there's no point in having a six-bedroom house when only two of you live there! Particularly as we get older, the need to downsize becomes greater.
We've put together some of the reasons why downsizing might be a sensible move that brings benefits year after year.
1. Take on a smaller mortgage
If you're still repaying your mortgage, then a smaller property could make your repayments more manageable. Not all small properties will come with a lower price tag, so make sure you do your homework to ensure your move is a financially sound one.
2. Cheaper to run & easier to keep clean
Generally speaking, the more compact your property, the cheaper and less time it will be to run in terms of gardening, heating/cooling and maintenance costs.
3. Extra money in the bank
The Australian Bureau of Statistics (ABS) reports that almost a third of all older Australians in low-income households are asset-rich, and cash-poor. Wealth is tied up in property, but that means it's not possible to access it quickly, in the case of an emergency.
If you downsize to a cheaper property, your liquid assets and cash reserves would likely increase, meaning you have more saved up for a rainy day and gives the perfect opportunity for you to pursue your hobbies and dreams that might otherwise have been out of reach or go toward your superannuation fund, or even further investment.
4. More practical later in life
Although a large home may seem advantageous now, ask yourself whether it'll still be practical during your latter years. You've not only got the upkeep of the property to consider, but also the fact that it might become more difficult to travel around as you get older.
5. No need to sacrifice your garden
If like many people you enjoy being in the garden, the good news is there are usually plenty of smaller properties available that still come with outdoor space. Green-fingered enthusiasts can therefore still enjoy the great outdoors but without the pressures of maintaining a large house.
When you downsize, you don't have to compromise your quality of life. In fact, all you're doing is removing some unused bedrooms and excess floor space from your life. Take the New South Wales suburb of Alexandria, for example. Auction results for the weekend of February 12 show that a three-bedroom house in the suburb sold for $1,690,000, while a one-bedroom unit sold for just $698,500. That $1 million saving might prove very useful later in life, and if you only need one bedroom, why keep a house with more?
For help finding out about downsizing and what options would suit your preferred lifestyle, the Department of Human Services is having free seminars covering the topics of pension, retirement accommodation and age care costs on March in Hotel Bruce Country in Mount Waverley.