Does it make sense for you to be downsizing your home now? Is this the right time to be considering shrinking your home and your lifestyle?
You may have a variety of reasons to consider shrinking your space in life. You could have family members moving out and you no longer need the extra rooms. You could be in a tight spot financially and need to reduce your financial burden. You could be taking advantage of a price increase on your current home and cashing in the profit while you can. When you look at the homes around Redding, they have an average home price of $231,000 as compared to the state average of $493,000. Maybe it makes sense to think about downsizing your home.
Or maybe it doesn’t. For whatever reason, you have the chance to make a choice if this is actually the right time for you to consider this big decision.
Let’s look honestly not at whether you should or shouldn’t, but if now is the right time to be downsizing your home.
Can you Afford Your Mortgage?
Let’s look at whether this is actually a good financial decision for right now. Some experts will say that downsizing into a smaller house will save you money in the long run, but is that actually true?
You may have a bigger mortgage payment than you would if you were in a smaller house, but you’re also paying off larger chunks of your mortgage with the bigger payments. You’re putting more equity into a larger asset, which will pay off bigger dividends in the future. If you can currently afford your house’s payments, it might be worthwhile to stick with the larger payment to accrue more equity for later on. Remember, that equity is leverage against your next big purchase, so the more the better.
If you are having issues keeping up with the maintenance of your current home, you might be considering a smaller home. If you have medical reason for wanting to downgrade and live simpler, a downsized house might be the right thing for you.
You will have much less house to live in, but you’ll have much more time on your hands with a smaller house as well. If maintenance is truly the issue, it might not be worth the hassle to purchase a brand new house. Maybe a possible solution would be to hire some help to care for the yard, the housework, and the little chores around the home. Maintenance issues don’t always have to be solved by a smaller home. You might just need a little help.
Offering up Spare Rooms
You might be feeling like you have too much space in your house if you’ve had people leave the home. You could have spare rooms that won’t be filled anymore, so maybe it’s time to try to find ways to fill those rooms again.
You could offer your house on services like Airbnb as a guesthouse with a room to rent. You get the benefit of making some spare money with the rooms you never use, and you have control over the times you offer it, and the people who wish to stay there.
It’s also not a bad idea to consider taking in a roommate, if you can make it work. It’s another way to both use the space that you have and also make some extra money you can put towards the mortgage repayments. You could never offer this opportunity if you decided to downsize your current home.
Missing Out on Resale Value
It might be worthwhile to hold on to your home for just a little bit longer. If your home has gone up in value, the longer you hold on to it, the more profit you’ll end up making when you sell. Your equity could be worth so much more if you hold on to a larger house for a year or two more than you originally thought you would.
You have the chance to take advantage of higher prices and keep your home until you must sell it. Watch the markets to jump in when the demand is high. If you can afford to, save listing your home until the market is at its peak. It will be well worth it to avoid downsizing for 12-24 months later.
Downsizing isn’t always the right move, especially if it’s not urgent. You could be saving the money and hassle of selling your home and putting an offer on a new home, just when you should be biding your time, sitting on your goldmine of a house. Be prudent about your decision, and decide if now is the right time to be downsizing your home.
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