Finding a new place:
Once you’ve made the decision to downsize, the next step you need to make is to decide where you want to go and what kind of home you want.
The location you choose will depend on several factors. Do you want to be near family? Do you want to reduce your work commute? Do you prefer a city, a suburb, or a rural environment? Do you want to move to a location that has a lower cost of living? Depending on where you choose to live, you might not actually be saving money. A large house in an area with a lower cost of living might actually be a better financial position for you than a small house in an area with a higher cost of living. Working out a budget at this point is pretty critical.
Very often, downsizers want a smaller home but with no less luxury. For example, if your larger home has granite countertops, most downsizers choose to have granite in their next home, and sometimes even use some of the extra cash they have to upgrade the kitchen appliances as well. Larger master suites are also a common feature downsizers want, and often are willing to sacrifice larger guest suites.
The type of home you choose will also depend on several factors. Some of your options are:
- Smaller house – The benefits of choosing to move to a house are many. First of all, you retain the most freedom this way – you don’t need to comply with HOA requirements or age restrictions. Choosing a house means you’ll still have to do the maintenance and upkeep, however, even though it will likely be less time consuming and costly than in a larger home. A house will probably have more space than any other option, so if a guest bedroom or two is important to you, or if you want a formal dining room, this may be your best bet.
- Condominium – Many downsizers choose condos not only because they are significantly less costly than a house but also because maintenance will be done for you. No more shoveling snow or raking leaves is a pretty nice incentive. In many cases, condos are only one story so you can eliminate stairs if that’s an issue. Condo living sometimes comes with sweet amenities like clubhouses, pools, tennis courts, and so on. If you choose a condo, however, don’t forget that you’ll have to pay HOA fees which vary dramatically from place to place.
- Rent – If you want to free up some cash, or move to temporary digs while your dream home is being built or while you’re waiting for retirement, renting might be a great option for you. The best part about it is that you are responsible for no upkeep or maintenance – even a clogged drain is fixed for you. Another benefit of renting is that you can stay in the same town without all of the expense associated with owning. The downside, of course, is that you aren’t building equity so it might not make sense financially.
- Active Adult community – Sometimes known as “55+ Communities,” active adult communities are a great option if at least one person is 55 years of age or older. Active adult communities can be condominiums, cooperatives, single family homes, or even mobile home parks. The benefit of an active adult community is the opportunity to choose a community of people in the same stage of life. Many also offer amenities such as community swimming pools, clubhouses, tennis courts, and so on.
- Continuing Care Retirement Community – A CCRC offers lifetime housing with advanced levels of care available as needs change. CCRCs also offer planned activities such as luncheons and parties for residents to get to know each other and socialize. Many offer bus trips to grocery stores and destinations such as the Jersey shore. CCRCs require an entrance fee and a monthly charge for care which is dependent on the level of support required.
When you decide where you want to live and the type of housing that appeals to you, it’s time to consider getting your current home on the market. At this point, you should contact a real estate professional who can help you determine what you need to do to prepare your home for sale as well as help guide you to finding your new dream home!
Earlier posts in the series: