Real Estate Blog - HomeGain

Does Downsizing Make Sense for You

Posted by Patrick Murray on June 23, 2017 at 07:59 pm
The kids have all "flown the nest," you're now retired and you don't have as much energy as you once did. Your home feels like a mansion; it takes ages for you to get around, even longer to clean and there's numerous rooms that you barely enter any more. This is a sensation that many older citizens experience and it brings up a fairly controversial question; should I sell my home in Denver and buy something smaller? This is referred to as "downsizing" and while some people are great believers in doing this, there are others that are fiercely against it. If this is something that you've been thinking about a lot recently, then this article might be of interest to you since we're going to take a look at the main pros and cons of downsizing.

The Truth About Downsizing By a Leading Real Estate Agent in Denver

There are a lot of factors that come into play when deciding whether to sell your home or not, particularly when you get past retirement age and the decision of whether to downsize is never one that should be taken lightly.

The Pros of Downsizing

Pros and cons

  • Minimize Your Financial Outlay - Downsizing can help make your nest egg last for years longer. If you live in a bigger property, it's common sense that you're going to spend more on maintenance and taxes. You have to pay an annual property tax that equates to about one percent of your property's value and the average amount spent on upkeep usually falls somewhere between one and three percent of your property's value. To put that in perspective, that means that if your home is worth $400,000, you could have to fork out as much as $16,000 a year. Reduce the size and value of your home and that annual cost can drop significantly, meaning you'll be able to spend more time spending your savings in a travel agent in Denver rather than on the phone to a doors and windows company or a local plumber.
  • Reduced Energy Consumption - The savings don't just stop there though, as the amount of energy you use will be reduced too. A smaller home costs less to heat and cool (which typically accounts for a large proportion of a household's energy consumption) and you'll also use less water. Not only does this result in you keeping more dollars in your pocket each year, but it helps to reduce your carbon footprint and protects the environment.
  • Less Stress, More Energy - The advantages of downsizing aren't purely financially related; although not having to worry about your expenses certainly makes life a lot less stressful! If you haven't already paid your mortgage off , downsizing can help you get to that point quicker, which lifts a big burden off of your shoulders. Combine these factors with the fact that a smaller home means you have less to do (think about how good it would be to have less cleaning to do!) and you will feel re-energized and ready for anything that life has to throw at you.

The Cons of Downsizing

  • Moving Can Be Expensive - While there are undoubtedly long-term savings when downsizing, you do have to expect a financial outlay initially, as you'll likely have a realtor fee to pay, legal fees and moving costs. It's also important to mention that the move in itself is a very demanding exercise, both physically and mentally and the effects of a move are further exaggerated as we get older.
  • "Letting Go" - It's human nature to become attached to the things that we know and love, and your home, which was most probably once a hive of activity when your children were young, is most probably associated with many of your fondest memories. It can be difficult, even upsetting, for people to leave that behind and start afresh.
  • Possible Compromises - Do you like the location of your current property? Is it close to your family and friends? What about local amenities? Sometimes when downsizing it can be difficult to find a home that's so well placed and you might be forced to look further afield. You have to consider that living further away means you'll likely spend more on gas, which would cancel out some of the savings that you make in other areas.

There are certainly a great number of advantages to downsizing and it's a decision that makes sense in a lot of cases, but that doesn't mean it's a good idea for everyone! When done correctly, downsizing has the potential to free up extra cash that will allow you to enjoy the kind of retirement that you always dreamed of. If you would like to speak to real estate agent in Denver that has a lot of experience in this area, contact us today.

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