When done correctly, downsizing houses can free up cash, simplify lifestyle and help reduce utility costs for years to come. This said, it’s not always a straightforward process and you’ll have to tread carefully to avoid major mistakes. Kingship Properties outlines some common mistakes – and how to avoid them.
Lack of Planning
It’s difficult to overstate the importance of planning when it comes to moving, even if you’re moving into something smaller. Your first task is to tackle the build-up of items in your possession – if you have boxes of stuff accumulated over the years, you’ll need to begin the decluttering early. There are plenty of experts who provide advice on how to manage this process efficiently. You can hire a professional organizer to create timetables, oversee operations, and ensure you’re only holding onto what’s most important.
You may have a wishlist of places you’ve always wanted to live. Over time, those places may have grown increasingly more unaffordable, because if you’ve always wanted to live there, lots of other people have to. Sometimes it’s not the area but the near proximity of family, or the move could be for better weather, or a lower cost of living. A little research will yield median home prices, but you’ll want a real estate agent for that specialized local knowledge, where home prices are likely to vary by neighborhood.
In the long term, a very expensive mistake is taking on a home loan with a high interest rate. Over time, because interest compounds, it can really add up. For example, an additional 1% interest on a $400,000 loan will add $71,870 in thirty years, or an additional average of $2,366 per year. Since every half per cent matters, be sure to check 30 year mortgage rates today to calculate monthly payments and compare mortgage types.
When it comes to actually moving, it can be worth hiring a specialized company – these will often make life far easier for you. Often, movers can include hidden fees for things like handling bulky items. Worse still, is if you have excess items, you may end up having to rent temporary storage or paying for waste disposal. It’s the unforeseen events that take us most by surprise.
Most utility companies require a large deposit upfront, before they’ll turn on services for a new occupant. If you haven’t moved in quite a while, it can give you sticker shock. The cost of utilities in some areas can be quite a lot more, so check with your real estate agent to ask the previous owner for realistic estimates about heating, cooling, water, sewer, and electric service.
This one doesn’t cost anything but there may be an emotional cost to moving. If you’re leaving friends to move closer to family, that’s not a perfect switch. Take heart in all you’ve got to gain, and be sure to express your kind gratitude for the good years the neighbors have given.
Before the move, it’s worth taking some time to spend with the people you care about in your community. Neighbors, friends, and family that you’ve lived alongside over the years will often want to come and say goodbye. Make sure that you’ve let everyone know and set plans to see them in the future – your decision to move away doesn’t have to mean saying goodbye!
In some ways, downsizing can be more of a headache than upsizing, but if done correctly, you should find yourself at the end of it with a simpler life and less to worry about.
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