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Thinking about downsizing?

02/07/2020

We take a look at some of the benefits of downsizing and what to consider when making the move.

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Are your adult children still at home, living the good life? Or perhaps you’re getting a little over feeling like an empty nester in all that space that no longer accommodates your family. You might even just be feeling like it’s time to get out of the city and embrace your sea change or tree change that is beckoning. If any of this sounds familiar, it may be time to consider downsizing your home!

Downsizing is a way of turning your unused space into an asset. If your last child has finally made the move out, then you probably have some rooms that you no longer use. It really opens up a whole new perspective when you start viewing this empty space as being something that ties up your time and money when you have better things to do with both. Downsizing is also a great way to encourage that last straggler living at home to move out and on to bigger things!

Freeing up money is a major benefit of downsizing. You could travel, buy a new car, a boat, start a new hobby or business, move to a city apartment, or stash it away for retirement. An added bonus is the amount of time you can save not having to clean that second guest bathroom or mowing the oversized lawn out the back.

Whatever you choose to do, it's important to consider your lifestyle as you plan for the changes ahead.

What not to downsize when downsizing

Don’t take the term ‘downsizing’ too literally. You don’t want to get overexcited and then downsize to find that you’re now surrounded by clutter, which can become quite overwhelming. While you may not need four bedrooms, you might still need one big enough to hold your exercise equipment for example.

Or if you are a keen vintage car restorer, does a carport have room for all the tools and parts you need? A large, lock-up garage that provides a water-tight shelter during storms may be essential.

If you’re a keen cook, you’ll need a big kitchen, even in a small home. Is there room for all your appliances? What about pantry space? If you’ve always had a kitchen garden for herbs and vegetables, that should be on your checklist too.

Downsizing doesn’t necessarily mean compromising. And it opens up a great opportunity to re-evaluate what you enjoy and what you should be looking for in a new home.

Where to next?

When considering your downsizing location, think about what makes you happy, your interests and your hobbies. Do you love the social interaction and exercise that comes from tennis, bowls or cricket? Look at the local sporting clubs and amenities to see if there are clubs you can join. If you like shopping in the city, think about how far away you can live without getting retail withdrawal symptoms. It’s also worth considering the public transport system in the area – will you be able to get around without a car? Perhaps a move further out will mean the purchase of a car when you have previously relied on public transport.

Before making the move, you might also like to consider renting in an area for a while. That way you can try it out, rather than rush into purchasing a property only to find the area doesn’t tick all your boxes after all.

Making a financially secure change

Depending on where you buy, your downsizing could cost more than you expect. An apartment in a sought after area may be tiny, but still cost more than what your house is worth.

A small place can be easier to maintain and you could have smaller utility and insurance bills, but there could also be tax implications for your move or the profit from the sale of your house could reduce a benefit or pension.

It's a good idea to speak to a financial adviser about your plans. It always helps to get a second opinion, and an accredited adviser can help you plan for your goals and personal circumstances. Everyone is different, so every downsize is different – and full of possibilities.

This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Information in this article is current as at the date of publication.

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