Downsizing Your Home? Watch the Financial Gains Roll In

Share:

Facebook Tweet mail
blog post author image

Written by: Guest | Best Company Editorial Team

Last Updated: July 30th, 2020

Topics: Money Saver

Modern home with cloudy sky in the background

Guest Post by Robyn Flint

For many homeowners, there will come a time when they consider purging their belongings and buying a smaller home. Often times this is true for those who are retired or who are about to retire. But is that the only good time to downsize? Should you consider buying something like a mobile home or even a tiny house while you’re still in the prime of your life?

There are many reasons for wanting to downsize and many benefits to living smaller. One of the greatest benefits is the potential for positive financial gains. Another is the process of finally decluttering. Regardless of your reasons, here are some considerations that make the case for why downsizing could be your best move.

bird nest

Accept the empty nest

You may be able to relate: You’re sitting at home staring at the mess and dreading the task of cleaning up. You start second-guessing the decision to purchase a larger home. 

Maybe you are experiencing an empty nest. You no longer need four bedrooms and three bathrooms. You may have brilliant ideas for turning the empty rooms into a gym or home office, but in reality, the rooms will probably become catch-all rooms for the clutter. 

You may be at the point of retirement. The thought of caring for a large home seems daunting. Maybe new health concerns are knocking at the door and decisions need to be made to prepare. Downsizing may be the first step in preparing for a healthy and peaceful retirement. 

→ Pro tip: Regardless of your current situation, the constant clutter and collection of dust bunnies taking over the unused space in your home may signal the time to downsize.

garage sale

Let go of the junk

There is more to downsizing than just decreasing the square footage of a home. Purging the junk is also a satisfying feeling. Nothing can close the walls in more than piles of unused junk. You don’t have to be a hoarder to know that feeling. 

→ Pro tip: A good rule of thumb is if you haven’t used it in the last year, you don’t need it. If an item in your home is so worn out that it no longer functions, it no longer has a purpose in your home. Trash it or donate it. 

If you have more than enough of an item to meet your needs realistically, then get rid of the rest. Consider what your family uses every day and what you can really live without.

Decluttering is a great feeling and can also relieve the stress caused by messy homes. The real reason for purging junk is to see just how much of your house is empty once the clutter is gone. The empty unused rooms are now wasted space and could be costing you wasted income. Plus you won’t have to waste money on storage units.

Enjoy the savings

There are many benefits to downsizing. There’s peace of mind, less to take care of, and less clutter to take care of. But the most beneficial perk of going smaller is the savings you will see in your bank account and the ability to have financial freedom without something like a reverse mortgage.

A smaller home also usually means a smaller mortgage or even none at all. Your monthly mortgage payments will decrease, leaving you more money in your bank account.

→ Pro tip: With a smaller mortgage payment, you may also see a decrease in your property tax and home maintenance expenses. Who doesn’t want that?

Larger homes are harder to heat and cool. It doesn’t matter what type of systems you have in your home, the size of the home will determine the cost. In addition to heating and cooling, electric bills and water bills are generally more expensive for larger homes. In a smaller home, the costs will generally decrease for utility bills.

Smaller properties also bring savings. Smaller properties cost less to maintain. Large parcels of land require costly maintenance such as mowing, landscaping, and tree trimming. We won’t even cover the cost of maintaining farmland. But if you no longer use your land or acreage the way it was intended, it may be time to downsize.

check

Expect financial gains

If you are looking for positive financial reasons that justify buying a larger home, there doesn’t seem to be many. Financially speaking, smaller is better. The savings come from many areas including mortgage savings, tax savings, and an overall decrease in maintenance and utility costs. You may also find that selling your larger home means you won’t have to forsake the equity you’ve built over time.

With extra money in the bank, there is more financial security, especially for retirees with limited income. More money means more investment potential. Those extra savings each month can go to work for you.

→ Pro tip: Talk with your financial advisor to help you maximize your investment potential based on your needs and goals. 

Robyn Flint writes for MobileHomeInsuranceQuotes.org. She is also an entrepreneur, owning three small businesses including a real estate rehab company. She is a licensed realtor, freelance writer, and published author.

The Top Mortgage Rates Companies

company logo
#1 NBKC Bank chevron_right
9.9 Overall Score
4.9
starstarstarstarstar_half
(405)
company logo
#2 AmeriSave Mortgage chevron_right
8.8 Overall Score
5
starstarstarstarstar
(13)
company logo
#3 New American Funding chevron_right
8.7 Overall Score
5
starstarstarstarstar
(16)

Related Articles

The Ins and Outs of ADUs

July 30, 2020

It is no secret that Accessory Dwelling Units (ADUs) are popping up all over, especially on the West Coast. Homeowners ...

Read More
Pay Attention to 1-Star Mortgage Reviews [Case Study]

July 30, 2020

If you gravitate towards reading negative reviews in your research, or even just for fun, you can thank your brain's aut...

Read More
A Must-Have House Hunting Checklist

February 24, 2020

Buying your first home is one of those milestones that can take years to build up to. There are many questions to ask be...

Read More