Last week, we explored right sizing as an option for living. In Part 2 of our series, we consider the benefits of right sizing as well as financial considerations to keep in mind.
Right sizing is changing something to the optimal size to fit your life. When it comes to housing, this could be going bigger or reducing square footage. It all depends upon your current situation.
Having a large residence can be wonderful but for many, a spacious home doesn’t fit their lifestyle forever. For those who are looking to right size to a home that’s smaller, there are considerable benefits.
Benefits of Right Sizing to Less Square Footage
- Usually with a smaller house comes a smaller mortgage. For those who’ve lived in their homes for years, they can often pay for a new, smaller residence outright.
- Lower utility bills and carbon footprint: you’ll use less energy to heat and cool your home, fewer lights, less water, etc.
- Reduced homeowners insurance. A smaller home typically costs less to insure.
- If you’ve reduced your mortgage, you will also reduce your property taxes. As a result of Propositions 60 and 90, if you meet certain requirements, you can also transfer your property tax basis.
- Simplifying belongings. Moving to a smaller home often means sorting through what you have, keeping some things while getting rid of others.
- Less stress. Simplifying your life through right sizing and reducing belongings, though possibly challenging at the outset, can reduce stress and anxiety.
- Optimized space. A cozier home means all rooms are utilized versus having a large home where for many, 80% of the time is spent in 20% of their home.
- Less upkeep. A smaller home means less to clean and maintain inside and out.
- For those who are aging in place, right sizing to a single story home is a safer environment that allows them more independence.
- Possible increased cash flow. If your mortgage and utilities are less per month, you’ll enjoy having more cash flow to do other things.
- Easier access to amenities. If you move from the suburbs to a metro area, you’ll enjoy close proximity to restaurants, shopping, and services and possibly even a stronger social circle.
For families who want or need to move into a large home, you’ll end up paying more but you, too, will incur a number of lifestyle benefits including more space for your family, room for guests, possibly a large Master Suite, a spacious kitchen and yards accommodating outdoor living.
When right sizing, there are financial aspects to take into consideration. These include:
- Costs incurred to prepare your current home for sale
- Costs of moving: storage, hiring a moving company, and the like.
- If you’re moving into a smaller space, you may have to purchase new furnishings to fit, while if moving into a bigger home, you’ll most likely have to buy additional furniture to fill the extra rooms.
- Increase in property taxes if you buy a more expensive home, or if you can’t take advantage of Props 60 or 90.
- Increased utility costs if you move to a larger residence
- HOA fees: For many who downsize, a condo or townhome makes a lot of sense. Be sure to factor in the cost of HOA fees-they could end up being considerable or, you may come out ahead or break even since you won’t have to pay for some utilities, a gardener, etc.
Whatever your reason for wanting to right size your residence, The Dawn Thomas Team is here to help. Our years of residential real estate experience coupled with an extensive list of professionals allows us to help you smoothly navigate the right sizing process.
Next week, in Part 3 of our right sizing series, we will talk about a relatively stress-free method to declutter, simplify, and minimize your belongings.