It’s exciting to move into a mega five-bedroom, five-bathroom house. But it’s equally as exciting to downsize into something cozier.
Sometimes we buy big houses because we need them to support our family.
A large house may suit our particular lifestyle.
And sometimes we want a big house just because we can afford it.
However, there may come a time in your life where you longer need a behemoth of a home, and downsizing starts to sound like the right call.
Here are some common signs it’s time to downsize.
All The Kids Have Moved Out
Buying a larger home to support a family makes a lot of sense.
Five kids aren’t all going to fit into a two-bedroom, one-bathroom house comfortably. Could you imagine that?!
It makes sense to move into a larger space to support a large family if you have one.
Eventually, what happens?
Maybe all the kids go off to college.
Some of the kids may get jobs out of high school and move out.
Or maybe they move in with a significant other.
Whatever the scenario, it’s likely your little ones will move out at some time, which will leave you with tons of empty space.
It might be time to downsize.
You Want to Lower Your Tax Liability
It’s no secret, but the larger your house, the larger your tax liability every year.
It’s unlikely your property taxes will go down. Instead, they’ll probably go up.
Depending on where you live, property taxes may be adjusted by the municipality:
When homes sell.
On a set schedule, such as once every two years.
Or when homes undergo improvements.
Should you find yourself tired of paying high taxes, it might make sense for you to search for a smaller house with fewer property taxes.
You Want Lower Mortgage Payments
The larger your house, the larger your mortgage payments.
We all know it’s more expensive to buy a 2,000 square foot house than a 1,000 square foot house.
One way to significantly lower your mortgage payments is to move into a significantly cheaper and likely smaller house.
Buying a smaller house can also help you save money on private mortgage insurance (PMI).
PMI typically costs half a percent to one percent of annual mortgage payments and is required when you can’t come up with 20% of the down payment.
It’s much easier to come up with a 20% downpayment on a cheaper, smaller home than a larger one.
You’d Like To Reduce Your Insurance Payments
Insurance payments are higher on larger homes than smaller ones.
Which makes sense; there’s a lot more to insure.
You may be able to reduce your annual insurance payments by downsizing to a smaller property.
Be sure to shop around to find the most comprehensive and budget-friendly homeowners policy you can after downsizing.
Although diving into the world of insurance is beyond this article’s scope, you should remember cheaper isn’t always better.
A cheap policy could leave you high and dry should you need to file a claim. So be careful!
You’ve Recently Retired And Transitioned To A Fixed Income
Transitioning to a fixed income may prompt you to reconsider how much you’re paying for the above items we discussed.
Mortgage
Taxes
Insurance
Thankfully, your mortgage won’t change (Unless you have an adjustable-rate mortgage).
But, insurance premiums and taxes are almost guaranteed to rise.
Increasing expenses are a fixed income’s worst nightmare.
So if you’re concerned you won’t be able to keep up with your property’s rising holding costs, it might be wise to downsize to something more manageable.
You’re Tired of Maintaining so Much Property
Who’s favorite thing is cleaning and maintaining a house?
It certainly isn’t my favorite thing!
There’s so much more to clean and maintain on a larger property than a small one.
And as your house ages, your yearly maintenance bill can start to keep up.
If you’re tired of having to maintain five bedrooms, countless hallways, multiple bathrooms, and all the other extra space you no longer use, it might be time to downsize.
You’re Ready To Cash Out Your Equity
You’ve spent years and years diligently paying your mortgage.
You have never missed a payment. Maybe you even paid early and a little extra to help save on interest.
Thanks to all your hard work and discipline, you have a substantial amount of equity built up in your house.
Have you recently been thinking about how great it would be to sell and have a fat stack of cash in the bank?
Now might be the right time to sell, pull out your equity, and move somewhere more modest.
There Are Multiple Rooms You No Longer Use
There may have been a time where every room in your house was fully utilized.
The kids had their rooms.
You and your partner both had your own home office.
You set up a game room or guest room that was used almost daily.
But now, things have changed, and those rooms sit vacant collecting dust.
If you find yourself no longer utilizing multiple rooms in your house, it may make sense to downsize and save money.
Medical Issues Keep You From Utilizing The Upper or Lower Levels of the House
Unfortunately, sometimes life deals us a tough hand.
You may be used to having your master bed and bathroom upstairs, but now you’re unable to go up and down the stairs safely.
You may find yourself cut off from half the space in your house or more in a situation like this.
Rather than paying a hefty price for space you can’t use, it could make sense to downsize to a house that’s only one floor and easily accessible.
You Were Renting Rooms, But No Longer Do So
With the rise of home-sharing apps like Airbnb, it’s never been easier to turn your house into a cash cow through short-term rentals.
Maybe you rented out rooms in your house, but now the management has become a hassle.
Or maybe you changed your mind and feel creeped out by regularly having strangers come in and out of your house.
Your house has now gone from a cash cow to a bunch of empty rooms.
Now could be the right time to downsize.
Family Members Who Were Staying With You Moved Out
Were you hosting grandma and grandpa? Or maybe your brother and sister?
Situations are fluid, and any family members staying with you may have found a place to live independently.
All those spare rooms are now probably sitting empty, which may be a sign it’s time to downsize your house.
You’re Lifestyle Has Changed
Sometimes we buy homes to match our lifestyle.
A 20 something might want:
A huge yard to host parties.
A large in-ground swimming pool.
And a massive kitchen for catering to their parties.
On the other hand, a 40 or 50 something may be pleased with a quaint, cozy little space that meets all their needs and lacks all those bells and whistles.
It’s perfectly normal to experience a change in lifestyle as we grow older. And if you find yourself with a house that suits your current lifestyle, it might be time to find one that does.
You No Longer Need A Huge Yard
We briefly touched on it earlier, but you may have a huge yard you no longer have use for.
Maybe you wanted a lot of land for kids to play.
Maybe you wanted a ton of room for the dog to run around.
Or maybe you had planned on putting up a volleyball net and trampoline for some backyard fun.
As time goes on and situations change, you may no longer have those same needs.
Why continue paying sky-high property taxes on land you no longer need, want, or use?
You Don’t Need That Four Car Garage Anymore
When you had a full house, you probably also had a full garage.
If the number of people living under your roof has diminished, and subsequently, the number of cars in your garage has dropped, you may be paying for wasted space.
Why pay for a four-car garage when you only need to store one? Or maybe none, depending on your situation.
You And Your Partner Have Separated
Although this topic is a sad one, it’s a reality some people find themselves in every day.
Last but not least. If you and your partner have recently separated, it’s very likely you no longer need all that space.
Consider whether or not it makes sense to downsize, and make sure you plan accordingly.
Ready to Sell? consider Selling To A Direct Homebuyer
Are you actively looking to sell your house?
Would you prefer to sell your house quickly without all the hassles that typically come along with listing on the MLS?
Here at Contenza Properties, we get. Sometimes you want a quick, easy sale where you don’t have to do any cleaning, repairs, or messing around with picky buyers.
We want to make you a direct offer to buy your house in its as-is condition. Which means you don’t have to prepare the house for sale in any way.
Contact us today by submitting your info through our simple form below.
One of our friendly representatives will reach out so you can receive a friendly, no-obligation offer.
About The Author
Jordan Reid founded Contenza Properties in April of 2018 to help homeowners solve their real estate problems quickly.
Since then, Jordan has helped multiple homeowners facing difficult situations such as divorce, property liens, and unwanted property inheritance.
Jordan believes in putting people first, and numbers second, which helps him reach the best possible solutions for the homeowners he works with.
Currently, Jordan and his team at Contenza Properties offer their professional home buying services in the San Francisco Bay Area, and Knoxville, Tennessee.