Downsizing your home is a way of turning your unused space into an asset. If your last child has moved out or you’re looking to simplify your space, then downsizing can open up a whole new lifestyle possibility.
Along with potentially freeing up some money, you might also find more time to do the things you enjoy instead of worrying about the maintenance and upkeep that larger properties often require.
Whatever you choose to do, it's important to consider your lifestyle as you plan for the changes ahead.
What not to downsize when downsizing
Try not to take the term ‘downsizing’ too literally. While it opens up an opportunity to re-evaluate your wants and needs, ensure you still have enough space for the things most important to you.
Ensure you still have enough space for your hobbies or to host any visiting family and friends.
This could include kitchen space if you enjoy cooking, enough bedrooms for visiting family and friends, a car garage for secure storage or the space for other hobbies like gardening.
Factor in the things you enjoy and look for them in your new home.
Where to next?
When considering your downsizing location, think about what makes you happy, your interests and your hobbies.
Do you love the social interaction and exercise that comes from tennis, bowls or golf? Look at the local sporting clubs and amenities to see if there are any you can join.
It’s also worth considering the public transport system in the area – will you be able to get around without a car? Perhaps a move further out will mean the purchase of a car when you have previously relied on public transport.
You could also consider renting in an area for a while. That way you can try it out, rather than rush into purchasing a property only to find the area doesn’t tick all your boxes.
Making a financially secure change
Depending on where you buy, downsizing could cost more than you expect. An apartment in a sought after area may be smaller, but might cost more than the sale of your house or chew into your profit.
A small place can be easier to maintain and you could have smaller utility and insurance bills, but there may also be tax implications for your move or the profit from the sale of your house could reduce a benefit or pension.
It's a good idea to speak to a financial adviser about your plans. It always helps to get a second opinion, and an accredited adviser can help you plan for your goals and personal circumstances. Everyone is different, so every downsize is different – and full of possibilities.
This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Terms, conditions, fees, charges and credit criteria apply. Information in this article is current as at the date of publication.