5 Questions to Ask When Downsizing Your Home

Are you considering selling your family home and moving into a smaller property? When the upkeep and extra space of a large home starts feeling like too much, many Americans look to downsizing as the natural, next step.

Here are 5 key questions to ask yourself when planning to downsize:‍

1. What is your goal with downsizing? 

Identify what your primary goal with downsizing would be. Do you want to...

• Have less storage space and things?
• Minimize property maintenance and repairs?
• Reduce expenses related to property management?
• Move closer to a family member?
• Find a new home that’s safer or more suited to your needs? 
• Unlock the equity you’ve built up in your home that’s appreciated in value? 
  

Once you’ve identified your main motivator, use it to guide the rest of your planning process. 

2. What is your financial situation? 

Take inventory of your personal finances and your equity position in your current home. In most situations, downsizing can be a good way of boosting your savings and lowering living expenses. However, there are a few things to consider first:

• Outstanding mortgage(s) — If you sell your larger home while you owe more in mortgage(s) than the home value, you will need to make up for the difference with your own money or go through a short sale. 

• Selling expenses — To get your larger home ready for sale, you may need to pay for repairs, staging, or realtor fees.

• Buying expenses — These may include home inspection fees, moving expenses, new property tax, and HOA fees. 
  

3. What type of home do you want to live in? 

Most likely, you’ll be interested in downsizing to a property that can suit your needs in the long-term. For most seniors, the four main options are: 

• Single-family home — A smaller single-family smaller house will be the closest match to your current lifestyle but still comes with maintenance and future upgrade responsibilities.
• Condo — Condos can be a good option for older adults who want to maintain independence but hand off the responsibility of property upkeep. However, don’t forget to take HOA fees into consideration. 
• Assisted-living community — Assisted living communities provide housing, meal prep and care-related services for seniors. This may be a good option for seniors with health challenges.
• Move in with adult children — Living with family can help ease the financial and physical burdens of living alone and enable you to spend more time with children and grandchildren.
  

4. If you want to continue living independently, do you want to rent or buy?

Wondering if the cost of owning a home vs renting is better? It may be surprising to learn that an increasing number of American seniors are opting to rent, instead of own. Owning your home has its benefits but it comes with the effort and cost of home ownership — including maintenance, property tax, and more.

“Most of all, we didn’t want to spend our time tracking down contractors to fix the roof and the pool heater. Managing a home was just more responsibility than we wanted.” 
— Kathy, retired registered nurse (early 70s) and Ron, retired General Motors executive (early 70s) to the Washington Post about their decision to downsize to a rental

As an older adult, home ownership as an investment becomes less important. Instead, the equity you might free up when you downsize to a smaller home can be put into investment accounts that are more readily accessible for your living expenses. 

Further reading: AARP article on the decision to rent or buy. 

5. What’s your plan for your belongings? 

One of the most daunting aspects of downsizing is paring down your belongings. The physical burden and emotional toll of saying goodbye to decades well-lived in a home you love can be intimidating. 

Start by taking inventory of your possessions and deciding how much space you will need to keep the things you want to. If you need more time to sort through your things, you can rent out storage space or engage professional rightsizing experts to help you with that job. If you’re not yet ready to part with most of your belongings, especially those with sentimental value, you may want to consider moving later.

Give yourself the time and resources to make the next choice. 

At Truehold, we believe you should have the time and resources to move on your schedule. With our sell and stay transaction, you’ll unlock your home equity based on competitive. What is a sell and stay transaction?

• We rent your home right back to you and charge competitive rent.
• We’ll take care of essential repairs, property tax, and property insurance.
• You keep living in your home as a renter with the time and money to find the right next step for you — whether that’s being a cash buyer on your next home or staying in the place you love.
  

If you’d like to learn more, give us a call at (314) 353-9757 and one of our representatives can help determine if Truehold is the best option for you.