We have a quest post today! Seth Murphy first got into doing DIY projects to save money, but over time he has developed a real passion for this hands-on, intensive work.
More and more empty nesters are finding that downsizing to a smaller home is a sound financial decision. When kids have left the house, you may realize that much of the space in your home is going unused. Downsizing to a smaller place that better suits your needs can free up some of the money you have invested in your home, giving you more financial freedom and more time to devote to whatever comes next in life.
Benefits of Downsizing
Lower Your Mortgage Payment (or Get Rid of it Altogether)
Owning a larger home has long been a sign of achieving the American dream, but in recent years that trend has been showing signs of slowing with the rise in popularity of tiny houses. The reality is that you don’t have to go to that extreme to see a difference in lowering your housing expenses. As long as you are smart about how you downsize (trading in a large property that isn’t valued very high for a smaller but expensive condo won’t pay off), you can end up with a significantly lower mortgage payment. Depending on how much equity you have in your home, you may even be able to start the next chapter in your life with no mortgage payment.
Lower Housing Costs
The savings you see from buying a smaller home really add up, beyond just lowering your mortgage payment, when it comes to hidden costs of home ownership. A smaller home uses less energy, so you’re not only lowering your carbon footprint, but you’re lowering utility costs too. Less square footage also means fewer possessions are needed to fill your home and less space to maintain. Other costs like property taxes and homeowner’s insurance are tied to the value of your home, so buying a less expensive property reduces these expenses.
Make Your Money Work for You
Becoming an empty nester is a time of transition, from raising a family to choosing what you want to do next in life. Owning a large home not only costs more on a regular basis but it also means a large bulk of your wealth is tied up in where you live. Buying a smaller home that frees up this wealth gives you the opportunity to invest it so that your money grows, giving you more freedom to do things like travel, or create a better cushion for future retirement.
Free Up Your Time
A smaller home means you have less space to clean and maintain, freeing up your time to do more of what you love. For many people whose kids are out of the house, the added time is worth trading in space you’re no longer using.
Maximizing Your Home’s Value
Make Updates that Pay
You will see a greater financial benefit from downsizing when you maximize the price you can get selling your current home. Anything that is in an obvious state of disrepair must be fixed. After making the necessary repairs, choose other updates wisely. Consult Realtor.com’s analysis of which projects give the best return on your investment before deciding which projects to prioritize. In general, curb appeal projects that spruce up the exterior of your home are almost always worth your time and money when it comes to resale value.
Be Cost Conscious with Remodeling Projects
When you decide which remodeling projects to take on, don’t assume you need an enormous budget to make a big difference. This Old House has great tips for keeping costs down on remodels without compromising on quality. For example, you can upgrade kitchen cabinets to be more efficient rather than adding square footage to the kitchen, which is much less expensive but accomplishes the same goal.
Becoming an empty nester is already a big change in life, so it’s understandable if you’re a little hesitant about selling the family home. It can be hard to embrace change, but once you do, you often find that closing one door can lead to a new one opening that holds amazing opportunities. Downsizing your home can be that opportunity that frees up your time and finances for the future.