One of the most important things to do before downsizing is make sure you’re emotionally and mentally prepared.

You may be ready to downsize if:

– You’re comfortable leaving the home that has years of memories attached to it

– You’re tired out from trying to clean and maintain a large house

– You’re on the brink of retirement

– All of your children have left home

– You are using less of the existing space, furniture, clothes and appliances you own

Next, you need to evaluate whether you are financially ready to downsize.

Downsizing isn’t always about going cheap. ‘Smaller’ may not equal less money. There is usually still considerable expense associated with selling your current property and buying and moving into a newer, even if smaller, one.

Take some time to sit down and carefully figure out what you can afford. Don’t just look at the upfront cost of moving into a new house or apartment – you also need to consider the running costs of living long-term in your new place.

How will your retirement nest egg be affected by living in a high-maintenance apartment? Will you need to buy any new appliances or furniture to fit the new place? Could your health later require you to purchase any special equipment to get around your new home comfortably?

Give a lot of thought to such questions to determine your readiness to downsize.

Now that you’re ready to begin downsizing, you should start by first downsizing what you already have in your home. This will give you an idea of what kind of new place to search for.

Pack up surplus clothing, books, movies, kitchen utensils, appliances and so on. Leave them in easy-to-access boxes in your current home. See how often you need to retrieve something from the boxes over the course of a couple months. If you end up not touching one of the boxes at all, then that’s likely stuff you can easily part with.

Practice living in less space by locking up spare bedrooms and lounges for a week or two at a time. If you’re comfortable and content living in the reduced space, then you’ll know that you can do with less rooms in your new apartment or home.

Measure the furniture you currently have so that you can figure out what can come with you when you go and what will have to be sold.

Advertise a sale right out of your garage or yard, or sell your stuff on Gumtree, to get rid of items that you won’t need in your new home. Don’t expect to get much for them, but the extra cash will come in handy.

Scope out the surroundings of a potential new living space. You have to love the environment as much as you love the residence. Is it important to be closer to fine dining, entertainment, hospitals, public transportation and other facilities? Or do you want a place that’s quiet and set far away from busy town living? Get to know the surrounding area before you decide to downsize and move there.

Most importantly, start your downsizing process early. You may even want to start simplifying your life long before you even have concrete plans to downsize. This will help make the process go smoothly and feel less overwhelming.

When downsizing, it’s important to get your finance right. Emnon will help you secure the best possible loan deal. Contact us for a free, no obligations chat about your situation.

Read Part 1: Should I downsize? The pros and cons

– Dom Cassisi, Managing Director

Pros:

– There is less to maintain in a smaller space

– A smaller space should mean there are fewer items in the home to maintain

– You’ll save the time and money you would have spent maintaining a larger place

Cons:

– Not all smaller spaces are cheap to maintain. Some apartments come with expensive required maintenance

– You may be losing a favourite hobby, such as gardening, if you downsize and give up all that yard space

– By renting a smaller space, you’ll forfeit some control over the condition and appearance of the property

Pros:

– For those looking for an exciting lifestyle change, typically downsizing puts you into a more cosmopolitan environment where you’d likely be surrounded by more people and greater opportunity for social activities

– Downsizing could put you closer to important facilities like hospitals and grocery stores

Cons:

– Downsizing to a smaller area could land you in a highly developed space with little privacy

– It may hit you a little too late that you don’t enjoy the surrounding environment as much as you thought you would

– You’ll have to get familiar with a new area including local public transportation and places to shop and do business

Pros:

– With less space comes less to maintenance costs

– Spend less on utilities such as heating, cooling, power and water in a smaller residence

– The money you save by downsizing can be invested in things like shares, super or another property

– You may be able to sell items (like a lawnmower, televisions etc.) that won’t be needed

Cons:

– Selling your current home to buy a new one will incur plenty of legal and government fees, not just the buy and sell price

– Other ‘smaller’ costs add up – removalists, minor renovations/fit out requirements, furniture and decor updates etc.

– Purchasing an apartment may come with a required maintenance criteria, compelling you to spend more than you would if maintaining your own home

– Even if you expect lower maintenance costs, you’ll have higher upfront costs just to get resettled in a new area

Pros:

– Downsizing may provide the opportunity to move closer to family, enabling the family to spend more time together and much greater convenience

– Downsizing can free up finances to support other family members with school/university fees, a first home or other need

Cons:

– Relocating could put you further away from the family and friends you now spend the most time with

– Living in a smaller place may make maintaining relationships with other family members in the home more challenging

– Not everyone in your household may be onboard with the plan to downsize

– Lack of entertaining space

– You may regret leaving your current home if it’s filled with happy memories

It’s clear that there’s no black-and-white answer. It will be entirely up to you to weigh the pros and cons and determine what’s important to you.

Something one person may feel is a benefit of downsizing may not sound good to you, and another feature others believe is a negative might actually be a plus for you.

As we’ve mentioned, it’s a big financial decision. Weigh up your financial situation with the experienced team at Emnon, who can help you get the best possible loan deal. Contact us for a free no obligations chat.

How do you know if you’re ready to downsize? And where do you start? Read Part 2.

– Dom Cassisi, Managing Director