What you need to know about downsizing as a homeowner

Downsizing can be a smart, rewarding choice, particularly for homeowners looking to simplify their lives, cut expenses, or adjust to changing circumstances. Whether driven by lifestyle changes, financial motivations, or a need for less space, making the decision to downsize is personal and requires careful thought. Here are some key factors to consider when thinking about downsizing.

1. Empty nest: when the kids have moved out

Many people downsize after their children have left home. As rooms go unused and the house starts feeling too big, maintaining it can feel like more work than it's worth. If your home is becoming a burden to manage, moving to a smaller space could bring the relief you need.

Key consideration: Before making the move, think about whether your children might return home temporarily or if you’d like space for future family gatherings, particularly if grandchildren are on the horizon.

2. Maintenance is becoming a challenge

Large homes often come with extensive upkeep, from yard work to repairs, which can become both time-consuming and expensive. If maintenance feels like a burden, a smaller, lower-maintenance home might be the solution. Many people opt for townhouses or apartments where services like landscaping or repairs are handled by a homeowners' association (HOA).

Key consideration: While these services can be convenient, make sure that the cost of HOA fees doesn't negate the savings from reduced home maintenance.

Here is a guide on what buyers, landlords and tenants need to know about HOAs

3. Financial benefits

Downsizing can offer significant financial advantages. A smaller home typically costs less to maintain, heat, and insure, and can reduce property taxes. The sale of a larger home may also help pay off any remaining mortgage, providing a financial boost during retirement.

Key consideration: Be sure to account for all costs associated with selling, moving, and buying a new home, including transfer fees, potential renovations, and moving expenses.

Here are the costs you need to prepare for when selling your property

4. You’re ready for a lifestyle change

Downsizing can bring about a refreshing lifestyle change, offering the chance to declutter and simplify. It allows you to focus on experiences over possessions and potentially move closer to desirable amenities like parks, cultural attractions, or family.

Key consideration: Reflect on what you want from your new lifestyle. Think about proximity to transportation, amenities, and activities that align with your future goals.

5. You’re only using a few rooms

If you find that you're mainly living in just a few rooms while the rest of the house remains unused, this is a clear sign that your current home may be too large. Heating and maintaining unused rooms can be an unnecessary expense, and downsizing can help you save on utility bills.

Key consideration: Take note of which spaces you actually use. If much of your home goes unused, it’s time to explore more efficient options.

6. Health or mobility concerns

As people age, navigating large homes with multiple floors or expansive layouts can become difficult. Downsizing to a home that caters to accessibility needs can improve safety and ease day-to-day living. Many choose single-story homes or active adult communities with amenities that support medical and social needs.

Key consideration: Plan ahead for future mobility needs by choosing homes that offer accessible layouts and are close to healthcare services.

7. The real estate market is favourable

Sometimes, downsizing is prompted by the opportunity to take advantage of a hot real estate market. If your home’s value has increased significantly, selling could provide the financial flexibility to purchase a smaller home or invest elsewhere.

Key consideration: While a favourable market is tempting, ensure that your next home meets your long-term needs. Don’t rush into a purchase simply because the market conditions are good for sellers.Downsizing is a personal decision, influenced by factors like lifestyle changes, financial needs, and health considerations. It’s essential to weigh the benefits of a smaller home against the costs of selling and moving. Planning ahead and making the move before it becomes urgent will allow you to manage the transition smoothly and enjoy the benefits of a simpler, more manageable home.