Whether you’ve decided to eliminate debt from your life, or you’re first time empty nesters ready for a new chapter, now may be the time to downsize your home. But before you start, it’s important to understand that there are many potential missteps along the way.
1) Not Setting Goals before Downsizing your Home
While the financial benefits of downsizing the family home can be numerous, it's critical to set goals before you start looking for that smaller Waterloo Region home. The following are the most common motivations for downsizing:
Combating debt
Bolstering your retirement fund
Paying off your mortgage instantly
Saving money after retirement
Reducing home upkeep and maintenance
2) Ignoring Hidden Costs
Although downsizing will almost surely save you money on your mortgage and utilities, that doesn't imply you should ignore financial caution. When house hunting, check sure the home you're interested in doesn't require substantial repairs or maintenance, or at the very least that you can easily afford them.
Also, be sure your new home doesn't come with high property taxes and/or HOA costs, which could deplete your funds. If you're downsizing to a more costly market, make sure to account for the potential cost of living increase as well.
3) Forgetting to Budget for Your Move
Don't forget about the costs of moving to a new place when you start to calculate how much money you'll save by downsizing your home. While you may be tempted to save money by doing all of the moving yourself, think about hiring a moving company instead. Not only will you have someone to pack, move, and unpack your stuff for you, but most movers also offer insurance, which means you'll be reimbursed if anything goes wrong.
4) Holding onto Junk You Don't Need
When it comes to moving, organization is essential, but it's even more important when downsizing your house. So go through your garage, closets, and spare rooms for anything that has been gathering dust. That giant model rocket you got at a space expo eight years ago may be fantastic, but do you really want to keep it? Start by gathering these kinds of items, then sort through old clothes, toys, outdated appliances, and other items into three piles: keep, maybe, and donate.
It's common to overestimate the number of items that will fit in your new home when downsizing. This can result in double-duty work, beginning before you relocate and continuing after you've settled in. Spending a little more time up front will help you simplify your move and will also make you feel good about not putting stuff in landfills.
5) Overlooking Lifestyle Needs
After you've defined your goals, think about what characteristics you'd like to have in your new home. This is especially vital when downsizing because you'll be living in a smaller space.
If you're downsizing because your children have graduated from high school and gone off to university, make sure that your new home will accommodate your choice of lifestyle and that whatever possessions you're bringing with you will fit AND that they'll have a place to sleep when they come home for a visit, even if it's just a pull-out couch type set up.
6) Paying for Rooms You Don't Need
When you think about the rooms in your house you use the most, it's generally very straightforward: the living room, kitchen, bedroom, and bathroom. Why have a dining room, den, or third or fourth bedroom if you're not going to use them?
You can simplify your search for a smaller Waterloo Region home by considering which rooms you now utilize and which you do not. A similar strategy can be used in your garden. If you find yourself spending most of your leisure time maintaining rather than enjoying your yard, it may be time to look for a new home with a smaller yard or one without a lot of upkeep attached to it.
7) Trying to Cram All Your Furniture In
While your two-story home has plenty of room for all of your belongings, the space in your next home will be a little tighter. So, before you start packing your sectional sofas or beds onto a moving truck, consider your new home's constraints.
Furthermore, furniture that is too big for a room will only make it appear smaller, so you might want to consider investing in a new couch that will fit perfectly in your new place rather than trying to cram the old one in.
8) Skipping Storage
A storage unit is a fantastic alternative for storing sentimental items like scrapbooks or seasonal items like winter coats, in addition to essential documents that you don't need access to frequently. Whether you're downsizing temporarily or permanently, renting a storage container is a terrific way to keep those items you don't have room for but can't bear to part with.
9) Not Making a Downsizing Schedule
Even before you factor in downsizing your home, moving is a lot of work. Remember to take it one step at a time to avoid becoming overwhelmed by the process. Rather than attempting to tackle everything at once, make a timeline for yourself and plan a moving schedule around it. By making a downsizing timetable and a moving checklist, you'll be more organized and less stressed throughout the process.
10) Choosing the Wrong Type of Home
When you've decided to start downsizing your house, you'll need to decide what kind of home you want to move into. The type of property you choose will be determined by considerations such as your budget, health restrictions, and desired lifestyle.
Working with a great real estate agent who understand your needs up front can help a lot here. As a great local Waterloo Region real estate agent knows the areas in the region very well they'l be able to not only help you find that great smaller space but also that it meets those important lifestyle wants and needs, like close proximity to shopping, easy access to parks, plenty of extracurricular activities nearby and more.
Getting ready to buy a Waterloo Region home, or sell the one you own? Let Team Pinto use their huge local real estate experience and expertise to help you. Contact the award-winning Team Pinto here, or book a free Zoom consultation to discuss your unique Waterloo Region real estate needs here.