Four Key Benefits of Downsizing Your Next Home
If you think downsizing is a step backwards, think again. There are many reasons why downsizing has become a popular choice for homeowners, especially retirees. Here are four reasons why.
1. Less maintenance and upkeep
While larger properties offer more space, they also require more cleaning, gardening and upkeep. For some, the time and money involved can be better spent elsewhere.
This is especially relevant if the kids have left home, and some areas of the property are no longer being used. Imagine spending less time cleaning and maintaining the house, and more time catching up with friends or pursuing hobbies.
2. Money for other things
Downsizing could potentially allow you to live mortgage-free, and if you have substantial equity in your current home, you may be able to pay off your next home outright.
In other cases, downsizing can mean a smaller mortgage, and as a result, reduced mortgage repayments. The potential savings could be used more cost-effectively, like reducing personal debt or even paying off your mortgage quicker or work towards other financial goals. See how much you can potentially save.
Another option may be to boost your retirement nest egg by making a contribution to your superfund from the sale proceeds of the downsize. From 1 July 2018, the government introduced a new measure allowing people aged 65 or over to make a ‘downsizer’ contribution to super of up to $300,000 from the proceeds of the sale of their home ($300,000 each for couples).
Be sure to speak to your accountant or financial planner about this option, or ask us for a referral. If you need help developing a plan to reach your goals, financial advice can really make a difference. A licensed financial advisor can help you identify realistic goals and put strategies in place to achieve them.
3. Lower ongoing costs
Downsizing may reduce the running costs of your home, like utility bills and maintenance. It costs less to heat or cool a smaller. Another important aspect of downsizing is that it’s better for the environment. If being green is important to you, downsizing may be the way to go, as with fewer appliances and smaller space you would use less electricity, which is better for the environment.
4. The ability to live in your dream location
Time for a sea change or a tree change? Perhaps you want a laid-back lifestyle or live in the heart of the city? Or maybe you’d like to live closer to the family? Downsizing to a smaller property could mean you can afford to relocate to the area you’ve always dreamed of living in.
Your family deserves a fresh start at a smaller home. If you’re thinking of downsizing, get in touch with us, and we can help you find the right finance for your specific needs.