Downsizing and Its Advantages
Maybe it starts as a “what if.” You walk through your house and into the room you never use down the hall and realize it’s lost its utility. You ask yourself, “What if we didn’t have that room?” You look at the things you’ve filled in the room: the furniture, the lamps, and the closet filled with boxes of random things you haven’t looked at in years. You ask yourself, “What if we didn’t have all this stuff?” It grows on you; the notion of less. Downsizing your home enters your
mindset, and it’s reaching the realm of possible.
The Financial Side
Reducing square feet of living space by purchasing or renting a smaller home often correlates to a gain in financial space by freeing up money for other endeavors. When you choose to downsize your home, big savings can result from the lowering of costs in a variety of categories, including heating and cooling, property tax, homeowner’s insurance, and maintenance. As a downsizing seller, it’s even possible you’ll own your next home mortgage-free if you have enough proceeds to purchase with cash. Imagine living without a mortgage. How would that change your financial picture?
Looking at Square Feet
The average U.S. single-family home built in 2016 has over 2,600 square feet of living space, according to the U.S. Census Bureau. That’s a lot of room. In fact, it’s over 1,000-square-feet more than the average single-family home built in the 1970s. Comparatively, the average square footage of a rental unit in the U.S. is shrinking. Across various types, from studios to two-bedroom units, the average size reported is 889 square feet.
If you’re considering the advantages of downsizing, make cost per square foot part of the equation. Zillow reported the November 2017 median list price of a home in Eugene was $187 per square foot. That same month, the average price of a rental per square foot in Eugene was $1.04, with $1,400 per month considered an average list price. In Springfield, the median list price of a home was $178 per square foot, with an average rental listing at $1,195 per month.
While downsizing your living space often has financial benefits, it also comes with some costs. You might have to purchase new furnishings for your next living space, as it may not accommodate what you currently own. If you wish to keep some possessions you know won’t fit in your new home, a storage unit might be necessary. Besides the physical baggage, leaving a home you’ve been in for years also comes with some emotional baggage, and you’ll need to decide how to handle that. You might not be able to host large family gatherings in your next residence. How will you feel as a result? The ability to host a meeting or special party may diminish as well.
Questions to Ask Yourself Before Downsizing
Why am I downsizing my living space?
What would I do with additional
disposable income if it’s made available because of a move?
How will my family feel if I choose to sell this home?
What possessions will I need to sell or dispose of?
If I need a space for an event, what are my choices?
Should you decide to downsize, you’ll come to understand that the process might just be more
about changing your mindset than ushering in deprivation. Living large doesn’t have to mean living in a supersized home with oodles of possessions. It might be more about learning to maximize quality, whether it be time, material possessions, or experiences. And who doesn’t want that?