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Should I Downsize? Part 1: Pros and Cons

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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.

Maintenance

Pros:

– 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

Cons:

– 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

Environment

Pros:

– 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

Cons:

– 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

Cost

Pros:

– 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

Cons:

– 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

Family

Pros:

– 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

Cons:

– 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

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