What are some common mistakes that people make when they’re considering downsizing? Below are a few of them with tips on mistakes to avoid when downsizing.
Mistakes to avoid when downsizing
Smaller space does not always equal lower costs.
Downsizing your space doesn’t necessarily mean your home expenses are cheaper. If you’re going from a house to a condo, watch for strata fees, special assessments or levies and hidden costs such as parking. These all factor into what your new downsized home will cost you each month. Yes, your property taxes, insurance and utilities will probably be less than your larger home, but these additional condo expenses may offset any savings.
Holding on to the past
The emotional toll of downsizing can be significant. We all have our treasures, photos, and mementos that we want to hold onto. One way to handle this part of the process is to make a list of what you absolutely can’t live without and what you can let go of and then stick to it. Be completely honest with yourself – if these items are packed in boxes in the basement and you don’t actually use or display them, then you can probably dispose of them either by donating them to a local charity, giving them to family or friends who may enjoy them, recycling whenever possible or as a last resort, put them in the garbage.
Overestimating the proceeds from selling your larger home
You might get a great price on the sale of your home, but don’t forget to factor in items such as real estate commissions, legal fees, moving costs etc. These will all reduce your profit, sometimes by thousands of dollars.
Going too small
Don’t leave yourself short when you move into your smaller home. Make sure you have enough room for the furniture and belongings that will make you comfortable in your new home. You don’t want to feel cramped and crowded. Things like an extra bedroom or space for an office may be important to you, so make sure you consider this as well.
Miscalculating your lifestyle choice
If you love to garden and can’t imagine not being able to do it, you probably don’t want to buy a condo where all you have for outdoor space is a small concrete balcony. If you love to entertain and have large gatherings with friends and family, a smaller space may not cut it for you. Don’t assume you’ll adapt to your new surroundings when it comes to something that’s really important to you (like having a separate office space or a garden for example). If your lifestyle means you “need” them, then don’t sacrifice that.