Most homeowners face the question at one point or another: downsize or stay in the family home?
With housing prices still on the boil in many cities, now’s an ideal time to consider the question of downsizing. Many baby boomers are in love with their homes and want to remain in them as long as possible for lifestyle reasons. But houses are a financial proposition, too. Some people will need the equity locked in their homes to pay expenses in retirement. [Globe and Mail]
If you've made the decision to downsize, here's some questions to keep in mind that will help you decide on the best home:
- What kind of lifestyle do I want? Asking yourself this one simple question could help you determine not only if you should downsize, but where in the city you'd like to live. Are you looking for a relaxing lake lifestyle? Acreage living? Smaller inner-city condo?
- Who will be living in the home? You don't just have to consider space for the people who will be living in the home full-time, but also who will be visiting and how often. Do you have relatives who visit a lot from out of town? Kids who may come home for summers away from school? Plan accordingly to who will use the space.
- Where do you want to live? Smaller doesn't always equate to a cheaper price, your location plays a big role here. What does your lifestyle look like right now? Do you crave the quiet and broader spaces of the suburbs, or would you benefit from being inner-city?
- Have you built up enough home equity in your current home to have a profit? This will also help determine your budget for the next home.
- Why did you decide to downsize? This question will help you make the decision easier. Think about what's in store for your lifestyle and future. Do you see yourself traveling a lot? The reason you choose to downsize could be the answer to all the other questions too.
If you do it right, you can walk away with a pile of freed-up funds that will let you do the things you’ve always dreamed of doing in retirement—travel, volunteering, social activities and community involvement. It works especially well if you’re emotionally ready to move and you have other reasons for downsizing, either to be closer to family, or perhaps to find a place that better suits your retirement lifestyle. But you have to have a plan. [Money Sense]
Do you have questions on deciding whether or not to downsize? Feel free to contact me anytime, and I'm also on Twitter.