You may find yourself in a situation where you have to change residences, but remember that downsizing does not necessarily have to be a negative experience. One of the main reasons that may prompt you to sell your home for a smaller place is financial stress.
When you buy a property and assess your affordability, you should always work out what you can afford by building a buffer into your calculations. This ensures that you will be able to meet your home loan repayments even if interest rates rise.
Often, buyers are so caught up in the excitement of acquiring a new home that they fail to consider this important step in their calculations and are then forced to sell their homes when they can no longer afford their bond repayments.
If you are financially stressed, downsizing can help you redefine your financial situation by reducing your bond or rental repayment. These are some of the factors you should consider:
Transport
If you are downsizing for financial reasons, look at the public transport network in relation to the new place you are moving to. It will make sense if you are near a bus or train station, so you are still mobile without needing to maintain the running costs of a car. This is also an attractive benefit if you are later in a position to buy a bigger home again and want to rent out this property.
Maintenance
When you choose a new home, think about the maintenance costs. If you are moving to a property in a complex, find out beforehand who is responsible for garden maintenance.
Face-brick homes are cheaper to maintain, as they do not need a new paint of coat every few years. Other maintenance costs – such as a pool in the complex – are also shared, which means you enjoy the facility with less strain on your pocket. A lift in your building may mean more convenience for you, but it also equals more costs