When moving to a smaller property makes ‘money sense’
Parents whose grown children have left home to study, travel or move into their own homes, often find it difficult to sell their large family homes because of the memories and emotions attached to these properties.
This is according to Tony Clarke, managing director of the Rawson Property Group, who says many of these ‘empty nesters’ also put off the decision because they feel that downscaling will entail a drastic change in lifestyle.
And then there is the daunting thought of the move itself and having to decide which of their accumulated ‘treasures’ to keep and which to let go of.
However, he says they may find the whole process easier to deal with if they can think of it not so much as downsizing, but rather as ‘downshifting’ to an easier, more secure and less costly lifestyle, as a reward for years of hard work.
”For a start, they will no longer have to worry about the increasing costs of owning and maintaining a large home, or about having to replace or repair major components such as the roof, wiring or plumbing as the property ages.”
Secondly, Clarke says they will have the opportunity to choose a home that not only offers them a higher level of personal security, but also a higher level of convenience, such as no stairs, or large shower stalls instead of bath tubs, or wider doors and passages.
“In addition, moving may mean they can, at last, afford some of those luxury features or new technologies they promised themselves they would have ‘someday’, or have more money to spend on hobbies, travel or even a new business,” he says.
“Moreover, the sooner they sell, the less chance there is that they will have to make a forced sale due to ill health, or just the lack of energy or agility to keep a big home in good condition.”
And of course, he says the younger they are when they decide to make a move, the easier it will be to get settled in their new home, make new friends and develop new interests.
However, Clarke says perhaps the most compelling reason to downscale is the difference it can make to one’s lifestyle after retirement.
“It has been calculated that most South Africans who have been in corporate employment and are obliged to retire at 60 or 65 will receive a monthly pension equal to less than a third of the final salary they were making, unless they start making additional private provision for their retirement well in advance,” he says.
“And one of the pillars of such financial planning is to pay off debts, including home loans, as early as possible while still earning, and then divert any and all spare cash into more investments or savings for retirement.”
Clarke says since middle-aged homeowners currently spend up to 50% of their incomes on housing costs, it stands to reason that most can achieve considerable savings by moving to a smaller property that is cheaper to run and easier to maintain, even if their actual home loan repayment is not that much lower.
“These savings can then be used to help them get ‘free and clear’ of all debts before retirement, or added to a nest egg that will help them maintain their standard of living in retirement.”
He says, however, empty-nesters who are contemplating a move need to keep a close watch on the property market in their area, and pick a time to sell when prices are rising or, at the least, stable.
“And this, of course, is where the advice and help of an experienced and trusted local estate agent is invaluable.”
Meanwhile, Clarke says the physical transition from a larger property to a smaller space can be made easier with some forward planning.
Here are tips from relocation experts:
– Think about where you will place furniture and other items in your new home, and carefully pare down your possessions to those for which you know there will be a specific space in your new home. Don’t leave things to the last minute, give yourself to visualise your new lifestyle and think carefully about your choices.
– Never move with things on the off chance that you will find room for them, and don’t rent a storage facility for any overflow. Now is also the time for grown children to claim any items they want from the family home, or let them go.
– If you have trouble parting with certain items, consider donating them to a children’s home, hospice or animal shelter, or having an auctioneer or second-hand dealer sell them to raise cash for your favourite charity.
– Scan any papers and photographs you want to keep and save them on a few CDs or memory sticks, or ‘in the Cloud’ for future reference.
– Maximise the space available in your new home. A spare bedroom can easily do double duty as a study, for example, and a wall-hung screen will take up much less space than a TV on a stand. Similarly, why not digitise your music collection so you can ditch the bulky hi-fi?
– Use the internet to explore innovative storage solutions, such as additional cupboard space above the existing kitchen units, double hanging rails in clothes cupboards, bookcases below counter overhangs, and hundreds of other clever ideas for keeping smaller spaces uncluttered.
Source – Property 24