Whether you are a recent retiree, newly empty nester, or just looking to simplify, downsizing can be the right move. Of course there are things to consider before taking the plunge. Check out our list of pros and cons to downsizing your home.
Pros
- One of the major benefits of downsizing is the funds you will receive through the sale of your current home. You could receive a large amount of money, especially if you live in a desirable location or have a lot of equity in your home. Also, if you have occupied your home for two years or more you are eligible for a one-time tax break that excludes you from paying capital gains on the sale of a property.
- Plus, moving into a smaller space, such as a townhouse, condo, or an apartment, will decrease your monthly expenses. You will most likely have a lower mortgage or rent, and cheaper utilities.
- Another pro to downsizing is the potential for amenities. Townhomes and condos often provide snow removal, lawn care, and garbage services as part of a small monthly owner's or renter's fee. Furthermore, some apartments have workout facilities, conference rooms, and swimming pools at your disposal.
- It can be easy to accumulate items throughout the years when you have the storage space. Downsizing is the perfect time to declutter and start fresh.
Cons
- One disadvantage of downsizing is leaving behind your familiar neighborhood and friends in the area. When you relocate you will have a new neighborhood to acclimate to and new neighbors to get to know.
- There is an emotional cost to leaving your home. For most, their home is where they raised their family and have made happy memories together. It can be difficult for you and your family to imagine living anywhere else.
- Another con is that a smaller home means less space. If you have a large family who visits frequently you might miss having the extra space to host and entertain.
- Moving can be stressful. It may be difficult deciding what items will make the move with you, how much to sell your home for, working with a realtor, and finding another space to call home.
When deciding if downsizing is the right choice for you, consider both the pros and cons. While it can be a stressful process, the benefits may outweigh any hesitation.