Your Experts Guide on Downsizing your Home
Planning to Down-Size your Home?
Get the Best Down-Sizing Help Right Here!
When is the right time to Downsize my Home for Retirement?
The 5 Key Considerations when planning to Downsize
1. Financial – Does it make sense to downsize your home now from a dollars and cents point of view?
Your financial position relates to both your assets and income. Do you own your home outright? If not, how much do you still owe? How much do you have in your Superannuation Fund? Are you still working, or, do you have regular income coming in from other investments?
Owing money on your property after retirement is not ideal, even if you have properly planned on covering your payment for the remaining period based on what you will be drawing as income from your super and any other income stream.
Interest rates may rise enough to put great strain on your drawings/income and property values can decline, meaning if you have planned on a certain return when you do sell, there may be a significant shortfall.
There are many financial variables to consider when planning the timing of downsizing your home for retirement. It is wise to consult with a certified financial planner to identify the best way forward from a financial perspective.
While Paul will take care of everything for you from a Home Downsizing ‘Real Estate’ point of view for areas around Brisbane including Mount Gravatt, Eight Mile Plains, Mackenzie, Rochedale, Springwood, Daisy Hill, Slacks Creek and Underwood “Call Paul Today”, we recommend talking to the experts for the Financial Planning side of downsizing for retirement.
Considering the Location... Where do I want to live when Downsizing?
2. Location – Are you planning on a Sea change or a Tree change for your retirement years, or do you want to stay close to where you are now?
Most considerations here will still point towards the Financial side of things. For instance, if you are planning a ‘Sea Change’ move, chances are that where you are going to live may have a higher cost of living than where you are living now.
This may well be the case even though you are moving into a smaller property. Higher cost of living is common in areas that have all of the available facilities as well as being handy to the water.
On the other hand, if you are living in or near the City and are planning on a ‘Tree Change’ and retiring in the country, your cost of living will most likely go down. Either way, it is important to understand all aspects pertaining to your planned downsizing whether you are moving great distances or close by.
Prioritise Events to make sure you are making sound Decisions
3. Events – What are your circumstances at the moment, what events are taking place for you as you are heading to retirement?
Change is inevitable for us all. Some of us handle change better than others. When it comes time to making major decisions like moving to a new house, for instance, it pays to pause and consider what else is going on for you right now. Too many changes all at once can be overwhelming and trigger some bad decisions.
Sometimes it is simply a matter of prioritising what you need to deal with first, second and so on. The main thing is making sure that you are not being rushed into making any of the big decisions.
The resounding message here is to take the time and effort to plan properly! This is the rest of your life we are talking about ?
How is your Health as you consider Downsizing your Home?
4. Health – What shape are you in now and are there any health matters to be considered when planning your downsizing?
Your health can have an impact on quite a few areas of planning the retirement chapter of your life. In particular, if you are looking to relocate to a different location, is the environment going to be good for your health.
If you have any health conditions, is the move going to improve your quality of life? Are there sufficient facilities to cater for any ongoing treatment you may need? As we get older, typically we become more dependent on health support services and it definitely pays to make sure you are going to have your bases covered.
Are you better off to downsize before you retire while you have the vitality to get the job done on your own terms before it becomes an absolute necessity? Or is it better for you after you retire because you are healthy enough and that way you will have the time on your hands to work it out the way you want?
What Lifestyle you would like when Downsizing your Home?
5. Lifestyle – Have you given yourself the opportunity to think about how you would like to live in retirement?
Retirement is here on your doorstep and soon you are going to have all the time in the world to do whatever you want. The house that used to be fit for purpose is now way too big and you know it will be great for another family to move into with a little sprucing up.
Apart from all of the considerations pointed out in points 1 to 4 above, it is equally important to let yourself visualise what sort of place you would love to live in. Consider everything from the property itself through to the environment, climate, community, facilities and all of the lifestyle factors that your heart desires. When your planned life of retirement is proven sustainable with a solid financial plan, you are well on your way to a happy and stress-free retirement.
Selling Your House
How do I get the Best
Sale Price for my Home?
There are lots of things that you can do to your existing home that can have a massive impact on your sale price without breaking the bank.
More on Downsizing… Guides & Tips
A Great Guide to Downsizing to a Smaller Home!
Perhaps you are thinking of downsizing for retirement, or you may be empty nesters now. Either way, the thought of downsizing to a smaller home, one that is more manageable in size than the family home, is both exciting and daunting at the same time!
Downsizing may not only simplify your life, it may even free up some funds to allow cash flow and depending on the decisions you make in your downsizing venture, you could end up debt free, or at the very least, it affords the opportunity to declutter years of accumulation of possessions, again simplifying your life!
Tips for Downsizing Your Home Before You Begin
Something to Think About… Your Finance
Let’s assume you have built up enough equity in your home. You could potentially achieve your downsizing venture without the need of a home loan and you could actually fund the purchase of your new home in the transition.
If this is not the case, you may be in the market for a home loan. As Banks tend to be more stringent when it comes to lending for more mature borrowers, in particular over 50’s, it would certainly be worth your while speaking with a qualified Mortgage Broker. A good Mortgage Broker knows the options and products available to you and this can save you having to wade through the mine field.
The banks will want you to show how you plan to pay off this new home loan, call it an Exit Strategy if you will. You may have shares, assets you could sell, perhaps an Investment Property or you may be able to access your Superannuation. All of this is a very good reason for working with a Mortgage Broker to make the job easier. They will be able to demonstrate on your behalf how you will repay the loan.
Timing is Everything with Home Downsizing
Should You Buy Before You Sell?
Something to consider when downsizing to a smaller home is when to buy your new home and when to sell you old home.
Depending on the current market, you may find that your old home may not sell as quickly as you anticipated, or it may sell for less than you expect.
The good thing is there are options and choices available for you to consider. In saying this, it is extremely important to consider these options well before making an informed decision.
One available option for you is a product called a Bridging Loan or Bridging Finance. This is solution is temporary in nature and allows you to buy a new home before you sell your old home. They are short-term home loans that, during the period that you are in between homes, will cover your cash flow shortfall. Once your old home is sold, your intention would be to pay off the bridging loan.
Keeping an Eye on The Market
While You Think About Your Current Needs and Into the Future
You could do this on your own, or you could get to know the great Real Estate Agents in the area, look for the ones who have integrity and knowledge about the suburbs and surrounding areas you are interested in. Things to consider are; your Social needs, Health Care, will you have family members move back in with you in the future, will this home possibly be the last home you purchase?
One Agent in particular who is open, honest and very knowledgeable in and around Brisbane is Paul Simpson. Paul is someone who listens well to your situation and has the experience and understanding to be able to suggest possibilities and solutions, and if he hasn’t already got a new home waiting for you, he will be able to find the perfect property for you.