Chances are you personally know someone who is considering the prospect of downsizing their principal place of residence.
As professional property buyers Albion Avenue often deal with clients who are downsizing. For many, it may have been years or even decades since they last bought a property, and for considerably less than they will need to pay today.
When downsizing a principal place of residence the thought of what to do and how to do it in today’s property market can be daunting and overwhelming.
Thinking through and planning the downsizing of your property should be a strategic move. If you get it right you could spend your twilight years well and truly enjoying the fruits of your earlier working years. If you get it wrong it can be stressful and very costly as you contemplate what went wrong.
Many say that buying your first home is one of the biggest financial decisions you will ever make in your lifetime. If that is true, then downsizing would have to be as equally important or run a very close second.
Whether it’s a parent, aunt, uncle, sibling, neighbour or a work colleague approaching retirement, downsizing often involves a large family home with lots of great memories but a space that is just too big to manage after the kids have long flown the coop.
Regardless of who, it is definitely not a decision that should be taken lightly and without due consideration. Here are 5 things empty nesters will benefit from considering when planning their property downsize:
You’ve no doubt heard the saying ‘asset rich cash poor’. Well downsizing creates the perfect opportunity for empty nesters to turn the tables. By spending less on your downsize purchase you can actually reduce your debt and access some of the equity you have built up over the years. Think through your property downsize carefully. Remember every time you move it cost’s you money. The last thing you want is to be downsizing again in a few years. Considering what is at stake, it could be worth your while seeking professional advice from a qualified financial planner or advisor.
Big isn’t necessarily the best. When it comes to downsizing size really doesn’t matter. Don’t get caught out buying what you just sold. Often we see people struggling to adjust to a downsize who are looking to buy a similar property to what they just sold. It might even pay to consider renting for a while first, to see if you can adjust to living in a smaller home or a new area.
Once you’ve sold your principal place of residence you will need to think about what’s next. As well as the purchase price for your downsize property, you will need to consider stamp duty and legal fee’s for the conveyance. Then, once you move in you will need to factor in the new ongoing costs such as: property maintenance (including cleaning, lawns/gardens, general wear and tear) council rates, utilities, body corporate fee’s, insurances and the like. And don’t forget the ancillary costs such as travel costs and any impacts on your personal time.
Downsizing actually creates the perfect opportunity to trade up in many respects. Consider swapping the large cumbersome yard and multiple storeys for views, lifestyle or a better location. And don’t forget that moving into a smaller space can be made a whole lot easier with functional furniture and clever decorating. It’s a great excuse to de-clutter and redecorate!
There is probably no perfect time, but you probably don’t want to be forced to downsize either. So plan it in advance. Downsizing is a significant lifetime decision. It’s not something to rush into or take lightly. Ask people who have been through it already what they did. If you are considering moving to a new area or away from family and friends it might pay to rent for a while first to see how you adjust and if you like it. Consider the future years as well. Mobility and convenience might not be an issue now but what about in another 10 years. Think lifts over stairs. Walking instead of having to drive to shops. Even proximity to public transport. After all it’s dirt-cheap when you reach official senior status.
If you or someone you know is thinking about downsizing contact Albion Avenue Buyer’s Agent for a no obligation consultation. What have you got to lose?
Shelley Horton is the founder of Sydney based exclusive buyers agency Albion Avenue. With a 20 year career honing her skills in every aspect of the property industry Shelley knows what makes a property worth buying and how to get the best deal.
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