Downsizing. To downsize or not, that is the question.

 In Categories, How to Live the Good Life

Downsizing

For most of my adult life I’ve been searching for dream homes. Gulp. Now I’m facing the idea of downsizing.

I love houses, and have to admit to being very lucky, having lived in a couple of (what I consider) dream houses which for various reasons at various times we had to leave when we moved to different countries.

Now the children have launched and we are alone like Darby and Joan. So like others before us the need for a big, or lavish, or luxe house with a large garden or land is not so important anymore and we are considering small and compact – although to tell you the truth I’m not really in love with the idea just yet.

I still quite fancy the notion of living in an old Cape Dutch house like the one below! Dream on.

Downsizing

Why do we end up in large homes on big blocks?

At the crux of it I guess we bought larger homes as we got older for different reasons.

  • We just outgrew small apartments and houses as the children got bigger.
  • We didn’t like watching the same TV programmes – (Joking! #sometimes)
  • We enjoyed entertaining and we enjoyed having space.

Maybe for other people there might be other reasons – owning a big house can very much be part of people’s dreams about being successful. Or impressing friends and family might rock some people’s boats. Maybe you were persuaded by an estate agent that you should climb up  the property ladder for investment purposes?

I think we’re also a little bit conditioned by society.

Have you ever been told NOT to buy a bigger house – if you are a product of the 80’s in any way, then you’ll know that everything bigger from shoulder pads to hair to houses was always considered better.

But was it really?

I can’t remember anyone ever telling me that smaller was better. No, as far as I can remember. Minimalism was something the Japanese did.

Before we had children our second house in South Africa was the one below.

Downsizing

It wasn’t fancy, but it was rambling. And we were okay with that because we were encouraged that as soon as you start making more money, your aspirations and ambitions should keep track with bricks and mortar.

The fact is nobody told us that us this isn’t necessarily right, certainly not the banks or advertising companies. I think in the last few years there’s been a much more altruistic wave of minimalism, of slow-your-home philosophies, and lower your carbon footprint movements sweeping the psyche of our society, and downsizing has become a modern concept.

According to The Huffington Post …

“The prevailing advice for retirees and their first cousins — pre-retirees — is to downsize their homes. The logic goes like this: With your kids launched, you no longer need so much space. Plus living in a smaller home will reduce your utility and maintenance bills as well as your taxes. Less expense and less time cutting the grass or fixing things equals more time and pocket change left to enjoy your retirement, or so the conventional wisdom goes.”

So paying for space we no longer need is a bit daft, when what we really need in retirement is cash flow, but living in the big family home means all our money is tied up in the house.

Which means there’s a financial case for downsizing because having a lot of money tied up in our home means it isn’t liquid. We can’t draw from it, do the shopping or pay the bills with it.

You might also like : How to cope with the stress of moving

downsizing

12 Reasons why you might be happier downsizing to a smaller house:

  1. It’s Easier to maintain.  You can maybe ditch the lawnmower, pare down your DIY tools, and spend less time around the house to have more time and money for travelling or doing what you really want to.
  2. You’ll spend less time cleaning.  Don’t know about you, but I detest cleaning, and I don’t really consider it a workout – I’d rather be out walking instead.
  3. It will be less expensive to run.  Of course smaller should mean less (unless you’re opting for the fancy shmancy penthouse suite). Generally not so much money will be required to purchase the new house, and it won’t be as less expensive to run: You could save on your utilities and monthly bills, such as,  rates, heating, air conditioning, household insurances, electricity, and water, for starters.
  4. You could incur less debt.  By selling and buying a smaller home you could end up with a smaller mortgage or even end up mortgage free. If you can ditch the mortgage altogether, then you’ll be better off.
  5. It’s a chance to de-clutter. Downsizing makes us think about what we really need and what’s superfluous.  You could earn a bit of extra cash up front and hold a garage sale or sell things on eBay before you downsize. Otherwise donate things to charity and have less to move.
  6. It could be mentally liberating. Possessions can weigh us down not only mentally but also in the amount of time it takes to look after them (hello dusting ornaments). A smaller house means there’s room for less possessions, which means less looking after, and less mental baggage. It can be quite cathartic to simplify and get rid of things that are quite literally weighing us down.
  7. Less environmental impact. We should probably all be concerned with our carbon footprint and be looking for ways to reduce it. A small home equals less power required to run things.
  8. A more involved lifestyle. Perhaps buying a smaller house means you’ll be able to purchase in an area with easier access to lifestyle amenites such as galleries, cinemas, a golf course, public transport, shops, restaurants, a swimming pool or a gym, and all the things you’d like to get out and enjoy in your free time?
  9. There’ll be less temptation to buy new things. If you don’t have a lot of room, there’ll be no reason to buy new stuff to fill it!
  10. You’ll have less decorating and maintenance to worry about. When the time comes to repaint, fix up cracks, have the pest controllers in or clean the carpets – you’ll be paying out less.
  11. You could move closer to friends or family. Perhaps you can buy a smaller house closer to friends or family and cut down on transport costs to visit them?
  12. It could be a better sales prospect. A smaller house could be construed as more affordable and might in the long term be a better investment when it comes to resale than say a mansion  – because it may appeal to a wider demographic

So it makes sense that we should all just rush out and downsize, right? Actually, maybe not.

Maybe downsizing to a smaller and less expensive house isn’t the right course for many people?

downsizing

Reasons Not to Downsize

There’ll be less room for family gatherings and the grandies. And don’t we need a little separation space from each other in retirement when he and me will be spending much more time together? 

Smart About Money,  suggests that maybe your new home may not be sufficiently less expensive and if downsizing doesn’t reduce your household expenses by at least 25% then it probably isn’t worth all the upheavel.

Expenses could rank up.

  1. You might be downsizing to a different or harsher climate where you’ll spend more on electricity.
  2. Household or car insurance could be more expensive in your new house in a new area.
  3. You may have to travel further or even fly to see your old friends and grandchildren if you move, which could rack up considerable yearly expenses.

The costs of downsizing.

There’s another thing to consider as well: The costs involved with downsizing. Because of course there are substantial expenses involved in selling your house and buying a new one.

  1. You’ll probably have to pay a real estate agent commission on the sale of your home, and this can represent a large chunk of money.
  2. Then there’s probably Stamp Duty to pay on the purchase of your new house.
  3. On top of that there’s the cost of moving, and removal  companies are expensive.

You have to consider how long it will take to recover that money in the long run. Will the new smaller house be saving you enough for all the upheaval to be worth it, especially if you’re already living mortgage free?

Downsizing.

Options

In fact wouldn’t it be better to keep the family home and earn a bit of extra cash by renting out a room, or perhaps you could set up part of your house as an AirBnB,  or just offer one room as  bed and breakfast, or renovate the garage as a studio or workshop to let out to someone who needs one? Or perhaps, with the right permissions, even run workshops from said studio or workshop?

Spending more in the process.

The other thing about downsizing is the thought process involved. You could be thinking in a compensatory way; “Well now I’ve downsized I deserve a better sofa, or we can have a new car, or we’ll put in a new kitchen or bathroom and do other renovations because we’ve moved somewhere smaller!

The bottom line

If a smaller home isn’t going to save you money in the long run, and if it’s not something you really want to do, then you’ll need to think about the other side of the coin and ask yourself if it’s worth all the trauma of moving from a bigger house you love to a smaller house that maybe you’re not really going to like.

Resources you might find useful, and thanks to: Homely, Becoming Minimalist and Huffington Post (The Catch 22 of Downsizing)

So Lifestylers – how do you feel about downsizing? Is your home your castle? Does house size matter to you? What’s important?

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Showing 14 comments
  • Rae Hilhorst
    Reply

    Hi Jo, I have loved reading your post and all the comments. We are in the process of selling our beautiful home and downsizing. We are hoping to move to a completely different area, close to places we enjoy that we can walk to. We catch public transport as much as we can now, bus and train into the city during the week where we also work, and then if socialising in the city we use public transport in and Uber it home. Both daughters have moved closer to the city and I must admit that is now where we spend a lot of our social time. We also in the past have spent a lot of time in Fremantle and that can be difficult to get to and requires two trains and a bus from where we live now and it wont be any different when we move closer to the city, though we will be one less train ride away. The problem now is that if we do move down to Freo it will be further away from our daughters. PPffttttt! What will be will be. I reckon it will be the first home that fits the profile that we are after x Rae

    • Johanna
      Reply

      Hi Rae, thanks for sharing your story and dilemma. When the kids grow up and move out it is nice to be close (but not too close) to them I think, and like you we are in the same boat pretty much – and always trying to second guess what the future will hold. I expect you’re sad about selling your beautiful home and trying hard to balance your ideas about where to settle in your downsizing quest. We too have endless discussions about the same dilemmas you mention. At the end of the day, something has to give and compromise has to happen because I guess if I’m truthful, I’m beginning to realise there is no utopia!

  • Renee
    Reply

    With the children gone and in their own lives, my husband and I made the monumental decision to downsize from our 2600 sqft home (5 bdrm,3 baths, 2 livingrooms, 2 kitchens…), to a 1 bath, 2 bdrm, teensy livingroom/kitchen combo, maybe 900 Sqft home on a private lake. It was scary to make the decision, but absolutely freeing to clean out and get rid of a lot of things in determining what goes to the new home. Without a huge mortgage and empty rooms, we are living life better than before with a great deal less stress. We value our family time so much more and spend quality time with each other. Oh, and we now ONLY have 1 television where before 6!

    • Johanna
      Reply

      That was a momentous decision Renee, but it seems as if it worked out really well for you. I think our attitude to how we are going to spend the second half of our lives is so important. Less stress, less house and more living is the way to go for many.

  • Life Images by Jill
    Reply

    I definitely am not thinking about downsizing just yet. We do have one son still living at home, but we want a guest room for when friends or family visit, a space for when our grandies sleep over, and a yard for them to run around in. I would actually like a slightly bigger house with a room that I can dedicate solely to my “stuff” and my work. And I would love a house with a bit more land around it, but that’s just a dream really. One day we will downsize but not just yet.

    • Johanna
      Reply

      I think you need to upsize before you downsize Jill 🙂 There’s upsizing and upsizing though isn’t there – you want to do it for specific lifestyle reasons, not just for a bigger house per se.

  • Irene Foley
    Reply

    We were in our early 50s and considering the future in retirement. We lived in an old weatherboard home which we loved but could see maintenance being a major financial problem in the future. We lived on a decent sized block so we had the thought to subdivide and build a new, low maintenance home in our own back yard. Never having done anything like this before, it was daunting, but gradually we worked through all the steps until building started. We had a very good builder and right on time, our new house was complete and we were ready to move in. We sold the weatherboard house at the front which paid for our new house – we were home free so to speak with no mortgage.

    We now have a smaller garden which I find easy to look after, modern layout, lovely new flooring which is a breeze to keep clean and all new fixtures and fittings. However, I can’t really say we downsized. Our new home is a bit larger than the old weatherboard but since it’s so much more open, I can clean in no time at all and we can enjoy a more spacious layout especially when the family comes around. Expenses are probably much the same as before but we don’t have the worry of repairs and the old house really did need to be renovated inside and out.

    We always enjoyed living where we were so this meant we weren’t actually moving away so my lovely neighbours are still my neighbours plus the fact the single lady who bought our old house is so nice and we’ve become good friends. After 21 years in the old house, I savagely decluttered and now I don’t keep anything unless I know it’s going to be used.

    We feel we made a good decision those years ago and are now reaping the reward. If and when it comes time to sell up, I know that we’ll get a good price for this house. It was a really good investment and when you think of it, it only cost us the price of our old house and perhaps a few sleepless nights working through the pre-build red tape.

    • Johanna
      Reply

      Hello Irene, Wow! Thank you so much for sharing your really interesting story. I love stories like this. Especially when they work out well in the end. It sounds as if you’re very happy in your home – and it was great to read about all the ins and outs and whys and wherefores. Thank you! Lots to consider for our next move too.

  • Carol
    Reply

    After living in homes ranging in size of 3500 sq. ft. to about 2500 sq. ft. – we decided that this was the right time for us to downsize. We moved back to a community that we lived in about eight years ago and bought a foreclosure (the only one in the entire area). The price was really good and we invested about $60,000 in renovations – new kitchen, new bathrooms, new family room (built an addition), new electrical, new plumbing, new garage, driveway, new flooring, new carpet – in other words, a whole new house from the outside in (and some on the outside). The house is now about 2000 sq. ft. – Our payment is less and this will be our forever home. First time in my life that I have walked through my home and said “I love my house”. This is the right place for us.

    • Johanna
      Reply

      Hi Carol, thanks for sharing your story 🙂 That’s so interesting! And I’m am so glad you’ve found a forever home to love. Isn’t it great when you absolutely know for sure, ‘this is the one and it’s the right place and I love it!’ 🙂

  • Kathy Marris
    Reply

    We have talked about downsizing in the future but at the moment we are enjoying the space of having a house with a yard and back shed where we can store our caravan and boat, plus have room for the dogs to run around. We also utilise the spare rooms downstairs as Airbnb accommodation so that helps to pay for some of the utilities and maintenance on the house. I guess as we get older having a two storey home will not be practical so we will need to downsize to a single level house or unit. But at the moment we are still enjoying living in our home. 🙂

    • Johanna
      Reply

      I think if there’s no pressing reason to downsize, then the time isn’t right, Kathy. Sometimes our hand is forced to make a decision, but it sounds to me as if you are happy as you are 🙂

  • Raychael Case
    Reply

    My father was a builder and growing up we always lived in big houses. It meant a lot of cleaning and work.

    Hubby on the other hand lived in the one small weatherboard house growing up.

    As we’ve moved constantly since we married (22 years ago this month), finding that massive dream home hasn’t really been an option. It’s been more a case of finding what is available at the time (usually at short notice), that suits the family and is within our budget. We have a very small mortgage on the house we are about to sell in NSW. Once sold it will mean we can finally purchase our forever home here in Perth, now that hubby’s work is permanent. I’m not sure I want a huge mortgage or a massive dream home though. Especially with the girls probably leaving home in the next few years.

    The thought of living within our means, with something manageable is more appealing. Not sure with all our belongings and three teens still at home, I’m completely ready to downsize though but getting close. Just so sick of moving constantly.

    • Johanna
      Reply

      Hi Raych, oh I’m with you on the moves and not wanting to move house again 🙂 I’m also a big advocate of living within our means. That’s great about your house in NSW! I hope things move ahead for you now and you can purchase your forever home in Perth.

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