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Do I need to downsize when I retire?
Homeowners approaching retirement often choose to downsize for a number of reasons, but you do not have to downsize if you don't want to.
Many homeowners decide to downsize their house when they get older, some before they retire and some afterwards. If you’re approaching retirement and have been considering downsizing, this article outlines the positives and negatives so you can have all the facts before you make a decision.
Choosing to downsize to a smaller house can make it easier to relocate if you’re prepared to rent somewhere instead of buying. Whilst homeowners can be hesitant about going back to renting after owning a property, it can take the pressure off in retirement and make life easier. You don’t have to worry about the maintenance and responsibilities of the property if you don’t own it; your landlord will take care of it for you which can help reduce stress.
Downsizing will also mean that you have a good reason to declutter your house. If you’ve lived in the same property for several years you’ve likely accumulated a vast amount of clutter that you just don’t need. Decluttering can be soothing and allows you to have a fresh start in a new property. This is often the way recently bereaved homeowner’s transition into their new life, being able to move away from the memories and create new ones. Here are some tips on decluttering to help you get started.
Depending on the house you currently own, downsizing can be a really good way to find a property that’s more suitable for your potential needs as you age. Often, retired homeowners look at moving into a bungalow or a flat, to avoid having to use stairs constantly which is a common issue as you age. You can also find something easier to manage; if you find that currently, you’re struggling to maintain your garden or the cleaning in your house, it may inspire you to look for another property that won’t have those problems. Finding a smaller house means less cleaning or a flat eliminates the upkeep of a garden.
If you’ve recently stopped driving, or are looking to give up driving soon, downsizing to an area with good travel connections can keep you social and mean you can still get around without having to rely on family or friends, letting you continue to make the most of your retirement.
There is also a financial benefit with downsizing; many downsizing homeowners find that they have to spend less on taxes, utilities and insurance when living in a smaller property. This will depend on the area that you’re looking to move to, so it’s worth checking local council tax brackets and insurance quotes to see if you will make a substantial saving long-term.
Negatives of downsizing
There are also negatives that you should take into consideration if you’re thinking about downsizing. You may find that, when you come to getting things sorted, your current house’s value is lower than you expected which leaves you much less to work with. In that situation, you might find that with the other costs involved in downsizing you aren’t going to be financially stable and decide against it.
The upfront costs of downsizing can put homeowners off; whilst you tend to save money long-term providing you’re living somewhere substantially smaller, the initial costs of moving vans, legal fees, stamp duty and potentially capital gains tax can be off-putting. It’s worth seeing how much you will be saving each month by downsizing; if you are spending way more on moving than you would be saving in say 12 months, you can decide if it is still worth it in your eyes.
There are other options to downsizing if you’re looking to increase your income during your retirement but don’t want to sell your house. You can look into renting your house out and living in a rented flat yourself so that the rent your tenants pay for you house both cover your rent and give you something extra each month to subsidise your living costs. This is a great idea for those who don’t want to let go of their property but want to start earning something from it. You can also consider just renting out a room or two of the house if you want to continue living there but still get some money out of the house whilst utilising the extra space that you have.
Whether you should downsize or not is completely up to you and your circumstances, so if you’ve been thinking about it and weren’t sure, hopefully, this article has helped you come to a decision. If you are interested in downsizing and want to find out how much your current house is worth, get in touch with us at We Buy Any House. We can provide you with a free quote and walk you through our process to get a quick and easy sale in a time-frame that suits you.
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