What is downsizing?
Bigger isn’t always better. If you have a large home, you might be stuck paying more for your mortgage, property tax or bills than you can comfortably afford, not to mention having an excess of space to maintain.
These are just some of the reasons why many older Canadians are choosing to downsize their properties to make their lives easier. If your children have grown up and left the nest, or you just want to simplify your life, downsizing your home for a smaller house or flat can make life easier and free up funds to do the things you love.
However, downsizing can be easier said than done, especially if you have a lot of belongings and memories invested in your current home, but the benefits can be worth it. This short guide explains how to downsize your house and how a REALTOR® can help you to sell your home and gain the equity to enjoy your retirement years
When is the right time to downsize?
Depending on your assets and liabilities after you retire, now is a great time to look at how much you require for downsizing. But deciding to sell your home and move somewhere new is a big step that needs to be taken with care.
You might benefit from downsizing your home if:
• your housing costs are too expensive and eating into your savings
• you have a large home that’s difficult or expensive to maintain]
• your children have moved out and you don’t need the extra space
• it’s a good time to buy and sell property and you think you could sell your home and use some of
the equity to travel or simply live a simpler life.
If you’re not sure whether it’s the right time to downsize, talking to a financial advisor or REALTOR® could help you to decide what’s best in your circumstances.
What should you keep?
Packing up all your belongings when you move can be a hassle, but it’s also an opportunity to clear out and declutter and streamline your life. This is especially the case when downsizing your home, as a smaller house or an apartment might not have the space to store everything.
If you need to downsize your belongings as well as your home, it’s a good idea to organize your stuff into things you need and things you can live without. While these are always going to be personal decisions, there are some items it’s generally recommended you hold on to:
• Important documents related to birth, death, marriage and divorce, pensions, insurance, medical records and legal documents.
• Essential kitchen equipment, unless your new house is fully furnished.
• Basic furniture and bedding, but only what you need.
• Family heirlooms, whether their value is financial or sentimental.
Items you want to keep but don’t have space for can be put into storage, but this will carry a cost.
What should you let go?
If it’s been a long time since you moved, the idea of selling or throwing away your belongings can be difficult, but it can also be liberating. Not only could you free up space and make money from selling unwanted items, you’ll also save money and time when moving.
You don’t have to be ruthless, but you should be realistic. If you haven’t used or worn something in the last 12 months get rid of it by gifting to family and friends or donating them to charity, although some may need to be thrown away. These might include:
- Clothes you never wear or that no longer fit.
- Furniture you don’t use that takes up valuable floor space.
- Old or unnecessary appliances and electronics that are obsolete (like a VCR or a Walkman)
- Sports and musical equipment that could find a new owner.
- Books, magazines, CDs and DVDs that are available digitally.
- Ornaments and decorations that don’t have sentimental value or are rarely used.
Another idea is to take a picture of them with your cell phone and look back on them when you wish to reminisce.
How to calculate your retirement budget
Life expectancy is now over 80 years for both men and women, so many of us can look forward to a long and healthy retirement. Working out your retirement budget will give you an idea
of whether you’ll be able to afford the lifestyle you want. You can also get an idea of whether downsizing could help your money to go further.
The amount you need for retirement depends on your living situation and the level of comfort you want.
To calculate your personal budget, you should add up everything you spend in an average month or year and see if your income or pension covers it.
This includes housing costs, bill payments, food and drink, services, clothing, healthcare, transport, leisure and other expenses.
What are your assets and liabilities?
When you’re looking to buy a new home, you need to know what you can comfortably afford. As well as knowing your budget, you should also know what your assets and liabilities are.
This refers to anything of value you own that contributes to your net worth. This can include:
• money in bank accounts
• savings and investments
• life insurance
• other retirement funds
These are debts that detract from your net worth. This includes the amount still to pay on loans such as mortgages, car loans or other personal loans, credit card debt and any other money you owe.
Subtracting your total liabilities from your total assets will give you an idea of your net worth.
Taking steps to reduce your liabilities, such as downsizing your home and switching to a cheaper mortgage, could mean there’s more money to go around.
How to Find the Right New Home
There’s more to choosing a home than the price alone. Talking to a REALTOR® about your needs and preferences should help you to find the ideal property that ticks all the boxes.
Location, location, location
Unless you’ve already picked out your dream retirement location, most people who downsize their home prefer to stay in the same area.
It’s familiar, your family and friends are there, and it’s less hassle to move your stuff.
Don’t go too small.
Downsizing doesn’t mean living in a shoebox. Make sure you visit the property in person to check that it’s large enough for your needs, especially if you like to have guests over. This includes the outdoor area.
One, two, or multiple levels?
Many downsizing seniors choose single level homes, so they don’t have to deal with staircases. Even if you’re fit and healthy now, a downstairs bedroom with an en-suite could be convenient in the future.
How to prepare your current home FOR SALE!
When it’s time to sell your home, you’ll want to make sure you’re getting the best price you can. However old the property is, some simple home improvements could add real value and make a better impression on your buyers. Improvements such as:
Spring cleaning: Make sure your home is as presentable as possible, inside and out. If there are stains in the carpet that you can’t get out, you might consider hiring professional cleaners or replacing them all together.
Decluttering: Clearing floor space and removing personal items from display will make it easier for people to imagine themselves living in the home.
Maintenance: If you’ve been putting off replacing a faulty door or fixing a leaking tap, taking care of these problems yourself or hiring trades could go a long way.
Tidying the garden: First impressions matter. Make sure your front yard and entrance make the right impression on your buyers.
Where to get help
When it comes to your retirement home, you want to get it right first time. Even if you have experience of moving, navigating the real estate markets and dealing with contracts can often be difficult and stressful. That’s where talking to your REALTOR® can help.
REALTORS® are specialist in property evaluations and understand the complex legalities involved in buying and selling a home. A REALTOR® can offer professional advice and take care of ALL the paperwork that needs to get done so you won’t have to go it alone.
Tony Rinella of Ethos Realty has been helping seniors to buy and sell in Winnipeg and the surrounding communities for over 20 years and has the skill and knowledge to ensure your transaction is completed successfully.
I have helped many people from all walks of life to buy and sell property without the hassle, since entering the Real Estate Industry in 1981. If downsizing and selling your family home is in your near future, call Tony Rinella of Ethos Realty today for a FREE No Obligation consultation on what you need to do to prepare your home to sell.
- You will receive a detailed list of items (specific to your home) that need to be done, and those that do not need to be done, to get it ready to sell.
- He will also provide you with a list of organizations that can help you declutter your home.
- He will also recommend reputable professionals that will facilitate the sale of your home, if you need them, such as: Lawyers, Contractors (electrical, paint, roofing, windows, flooring, foundation, etc). As well as Home Inspectors and Financial Advisor, if needed.
There are many aspects to downsizing that you need to address before making the right decision.
Call me and find out what your home is worth and if downsizing is right for you!
Tony Rinella – B.A. Urban Studies
Ethos Realty 755 Osborne Street, Winnipeg, MB. R3L 2C4 204-771-3866
You can also find me on my Facebook Page Tony S Rinella
or on my Business Page: Ethos Realty Tony Rinella
as well as on Twitter, Instagram, and LinkedIn
YOUR REAL ESTATE EXPERIENCE MATTERS
MADD Canada – Manitoba Chapter Board of Directors (2020 – present)
Manitoba Realtors® Shelter Foundation Past Chair (2022-2023)
Recipient of the CMHC & MREA Distinguished REALTOR® Award (2019)
Winnipeg Regional Real Estate Board of Directors – Director at Large (2017-2019)
Manitoba Real Estate Association – Board of Directors – Director at Large (2013-2016)