Should I Downsize? Part 1: Pros and Cons
Whether to downsize or not is a big decision and shouldn’t be taken lightly, says Funding Options managing director Dom Cassisi.
As with any other major decision in life, the choice to downsize your residence comes with a handful of both benefits and downsides.
People choose to downsize for a number of reasons: to save money, to reduce stress, to declutter and more. Whatever your reason may be, it’s important to carefully review the pros and cons of your decision.
Here’s the key considerations.
– There is less to maintain in a smaller space
– A smaller space should mean there are fewer items in the home to maintain
– You’ll save the time and money you would have spent maintaining a larger place
– Not all smaller spaces are cheap to maintain. Some apartments come with expensive required maintenance
– You may be losing a favourite hobby, such as gardening, if you downsize and give up all that yard space
– By renting a smaller space, you’ll forfeit some control over the condition and appearance of the property
– For those looking for an exciting lifestyle change, typically downsizing puts you into a more cosmopolitan environment where you’d likely be surrounded by more people and greater opportunity for social activities
– Downsizing could put you closer to important facilities like hospitals and grocery stores
– Downsizing to a smaller area could land you in a highly developed space with little privacy
– It may hit you a little too late that you don’t enjoy the surrounding environment as much as you thought you would
– You’ll have to get familiar with a new area including local public transportation and places to shop and do business
– With less space comes less to maintenance costs
– Spend less on utilities such as heating, cooling, power and water in a smaller residence
– The money you save by downsizing can be invested in things like shares, super or another property
– You may be able to sell items (like a lawnmower, televisions etc.) that won’t be needed
– Selling your current home to buy a new one will incur plenty of legal and government fees, not just the buy and sell price
– Other ‘smaller’ costs add up – removalists, minor renovations/fit out requirements, furniture and decor updates etc.
– Purchasing an apartment may come with a required maintenance criteria, compelling you to spend more than you would if maintaining your own home
– Even if you expect lower maintenance costs, you’ll have higher upfront costs just to get resettled in a new area
– Downsizing may provide the opportunity to move closer to family, enabling the family to spend more time together and much greater convenience
– Downsizing can free up finances to support other family members with school/university fees, a first home or other need
– Relocating could put you further away from the family and friends you now spend the most time with
– Living in a smaller place may make maintaining relationships with other family members in the home more challenging
– Not everyone in your household may be onboard with the plan to downsize
– Lack of entertaining space
– You may regret leaving your current home if it’s filled with happy memories
Is Downsizing Right For You?
It’s clear that there’s no black-and-white answer. It will be entirely up to you to weigh the pros and cons and determine what’s important to you.
Something one person may feel is a benefit of downsizing may not sound good to you, and another feature others believe is a negative might actually be a plus for you.
As we’ve mentioned, it’s a big financial decision. Weigh up your financial situation with the experienced team at Funding Options, who can help you get the best possible loan deal. Contact us for a free no obligations chat.
How do you know if you’re ready to downsize? And where do you start? Read Part 2.
– Dom Cassisi, Managing Director