For some people, a large home is their pride and joy. Yet, you may find the size and cost of yours burdensome. People move to smaller homes during all stages of their lives. If you’ve thought of downsizing, these two considerations can help you decide whether to do so.
Downsizing can improve finances
You may find yourself struggling to make mortgage payments on your large home each month. Even if your finances are good, you might gripe about the exorbitant gas and electric bills that come with large homes. If you’re spending more than 30% of your take-home pay on home expenses, it may be time to downsize. You’re likely to profit from selling your home, since smaller houses tend to cost less. And depending on how much you profit off your home’s sale, the first $250,000 – or $500,000, if you’re married – will avoid capital gains taxes. Yet, if real estate agent fees and moving costs equal or exceed these benefits, you may be better off staying put.
Downsizing reduces household tasks
A challenge of owning a large home is the time you devote to maintaining it. Big houses have more rooms to clean, fixtures to repair and yard space to tend to. By moving to a smaller house, you reduce the total space you keep up, and you can likely spend less time taking care of it. You will likely save on maintenance costs, too. If you have a large family, the loss of space may create a cramped situation, no matter the benefits. But if your family is small – or if you’re an empty nester or single – reducing space and tasks may pay off.
While downsizing to a smaller home has its benefits, it’s not a choice to make in haste. Working with an attorney who has real estate experience can help you with the financial and contractual aspects of your decision.