One topic that comes up often when I hold an open house is downsizing. Sometimes it’s brought up by neighbors who are thinking about downsizing. Other times it’s people who have sold (or are in the process of selling) that big family home and are looking for a smaller home—something more manageable and closer to DC—like Arlington or the Town of Vienna.
If you’re considering downsizing, there are a number of factors that should influence your decision. What factors, you ask? Well, I just came across an article By Dave Ramsey, the investment guru, about downsizing, and I thought he summed it up rather well. His key points were:
- Think long term: Is downsizing a good move for you in the long run?
- Keep it functional: Are you really going to be happy going from 3,000 Square Feet into a 300 SF tiny home?
- Consider Hidden costs: Will your furniture, appliances, etc work with the new home?
- Focus on the big picture: How are you going to make it work?
He goes on suggest a few benefits to downsizing:
- Attack debt: Use the equity gained by downsizing to pay off debt.
- Boost your retirement savings: Use the equity to invest (don’t forget real estate).
- Use the equity gained to pay off your mortgage.
My downsizing experience, or not
For years, my wife Julie and I viewed our homes as investments: We would buy a old home, tear it down, and build a new home, 4,500 SF +, with lots cool features, live in the home for a few years, sell, rinse and repeat. After we sold our last “investment” home in Arlington, we thought downsizing would make sense. We bought an older ranch style home on a large wooded lot in Falls Church. Our goal was to paint the interior and exterior, refinish the hardwood floors, move in.
As we waited to settle on the home, we talked about what we wanted in this home and how we wanted to live. I realized the house was too small and dated for our lifestyle. To make it work for us it would involve a whole house renovation plus adding two additions. We did the work. The result is a beautiful home. It just wasn’t a downsize.
As we were completing the renovation I laughed, we didn’t downsize, no, we went sideways. What’s sideways? Making a lateral move. We built the home we wanted, and still gained some of the downsizing benefits.
Are you thinking about downsizing or moving sideways? Give me a call, I’ll be happy to share my insights.