Many 55 Plus (55+) Retiree homeowners give thought to reducing their living costs. One of the most significant ways to accomplish this is by downsizing their homes. That might reduce mortgage loans and living costs. Maybe you have less people in your home now than you did in earlier years. (Kids off to college or even better yet, getting married). Maybe your retirement savings or other financial situations have changed due to the financial crisis. Maybe it makes sense to swap a three bedroom house for a one bedroom condo. That should provide extra funds.
Regardless of the reason, downsizing your home probably means reducing your overall cost of living. The key word is probably. Do the math and make sure that there are savings to be had. The fact of the matter is, it’s possible that you’ll end up paying more.
A recent survey by the Demand Institute shows that more than 40 percent of Americans ages 50 to 64 plan to move within the next five years. Many will strive to save money by downsizing to a smaller place. There are many potential financial benefits to downsizing.
- Smaller mortgage loan: A smaller home is usually a less expensive home, which means homeowners might cut the cost of financing by downsizing their residence or eliminate mortgage payments completely.
- Fewer utilities: Less square footage could significantly reduce your utilities. (Heating, Air Conditioning, Lighting, etc.)
- Less maintenance: Fewer rooms and a smaller yard usually means less work. In fact, if you move into an Over 55 community with moderate HOA fees, you have nothing to do but enjoy your life.
- Fuel savings: Consider moving into neighborhoods with better “walkability”, this might allow you to drive less and save on gas and car maintenance.
In doing the math, there may be more to consider than you may think. There are several expenses to deal with in moving. Some include;
- Moving Expenses
- Closing Costs
- Cost of buying furniture
- Finding room for all the things you’ve accumulated over the years.
- Has the local housing market affected the value of your home?
- Moving to a Condo or HOA involved Condo or HOA fees.
A general rule is that if you can’t cut your expenses by 25% or more, you may not want to bother with it. After doing the math, you may find that you would be even farther behind.
Being a homeowner doesn’t mean you must remain a homeowner. You may decide to downsize and trade a house for an apartment. That would avoid many of the above expenses and perhaps cause less stress than buying another property.
Do The Math
Candace 561-927-7566 Joel 561-374-4030