Upsizing or Downsizing Your Home: What’s Right for You?
In 2021, 770,000 new houses were sold in the United States. Many of them were due to Americans upsizing or downsizing their current home, based on their new needs.
If you’re planning a new move, you may be considering whether you should upsize or downsize. While this will often depend on the size of your family, there are also a number of other things to consider.
Here are some things to think about if you’re considering upsizing or downsizing your home
Are You Using the Space?
If you’re expanding your family, you’re likely to need more room in the future. This is particularly true if you’re planning more than one child. However, if the kids have moved out and it’s just you and your spouse, it’s unlike that you’ll need five bedrooms and four bathrooms.
If you downsize, you’ll have less property to maintain, making it much more manageable if you find it difficult to get around or you’re super busy. When you’re juggling work and family responsibilities, you may find that you simply don’t have time to maintain your home the way you’d like.
Sure, once you retire you’ll have more time on your hands. But do you want to spend that time cleaning gutters, shoveling snow, cutting the lawn, and trimming hedges? While upsizing will give you more room, downsizing gives you more time and fewer maintenance responsibilities.
Where Do You Want to Live?
When you live in a big city, you’ll naturally be able to afford less living space than if you were to move to the suburbs or a small town. Many millennials are upsizing and are now moving away from the city center and into the suburbs.
This allows them to have more room to start a family and more living space for when friends and family come to visit. The good news? You may be able to find a home that’s somewhere in the middle- affordable, but close enough to the city to keep you in the thick of things. Property management companies will often have a wide variety of properties for you to choose from.
Do You Need to Save Money?
Even if you’ll be able to completely pay off your mortgage before retiring, you’re still paying property maintenance, utilities, homeowners insurance, and property taxes. These are all higher when you have a larger home.
Not to mention, your current home can potentially be a large source of your retirement capital. While most people want to live mortgage-free, it may not necessarily be the best idea to have most of your capital tied up in your property.
If you’re not sure if your retirement portfolio will be as large as you need when it’s time to retire, it could be worth downsizing. For example, let’s say that your home is worth $600,000 and you’re planning to pay off your mortgage before you retire. By selling that home, you could spend $300,000 on a smaller, more manageable home and have an extra $300,000 for your retirement savings.
This can make a massive difference to your standard of living and retirement age.
Do You Plan to Travel?
Most of us dream of traveling in our retirement. For people who have failing health or don’t like the idea of traveling, you’ll probably be content in your current home. But if you’re planning to spend large parts of your retirement traveling, this is a different story.
The excess cost and size of your home could be competing with those travel plans unless you’re able to rent it out or use a service like Airbnb while you’re away.
Do You Entertain Often?
If you love entertaining or often have visitors coming to stay, a larger home may be appropriate for your lifestyle. Whether it’s a dinner party with good friends or hosting a social event, you need a home that will fit your needs.
Upsizing allows you to host visitors for longer without feeling like you’re all living on top of one another. This is a good option if your kids live out of town or if they like to visit with their kids. When you have a large home, you can easily all stay under one roof for the holidays.
Do You Want Your Dream Home?
We all have dreams. Maybe you’d love a kitchen worthy of a chef. Or perhaps you’d like a high-tech office. Maybe you want enough land for a horse, or you’d really just like an open-plan living room and kitchen.
Sometimes, it’s worth upsizing simply because you’ve always wanted to live in your dream home. And often, “dream homes” have luxurious features that are typically found in larger designs. We all have different priorities in life, and if you’ve always wanted to live in a home worthy of an interior designer, why not make it happen?
Do You Need a Specific Layout?
As we age, we have specific health challenges. Often, it’s difficult to navigate multi-level homes, with narrow hallways and steep staircases. That’s why many retirees choose ranch-style homes.
This type of open-plan living can make it much easier to get around and reduce the risk of injury from a fall. Since they’re roomier, these homes usually require upsizing but can be well worth it if you’re sick of going up and down the basement stairs.
Thinking About Upsizing or Downsizing?
As you can see, when you’re deciding whether you should upsize or downsize, you’ll need to consider a number of different factors. These days, age has little to do with house size, and this instead comes down to personal preference and needs.
It’s worth making a list of the pros and cons of both choices and spending some time considering the implications of both.
Are you thinking about upsizing or downsizing your home? Let us know in the comments below or get in touch.