If you are like most people, who settled down with a family in your early working life, and purchased a sizeable property, you may now be looking to downsize. Having a big home is expensive to run, and now you and your partner have retired or the last of your children have “flown the nest”, all that space is no longer required. And after all, it is pretty much accepted that, if you have the space to spare, you will fill it with clutter and items that should have been destined for the skip or recycling centre, long ago. You have worked all your life, and now is the time to sit back and enjoy the fruits of that labour, to be finally able to truly relax, and not be handcuffed to the alarm clock any more. Let’s take a look at some of the benefits you can look forward to, by downsizing your property, and selling up, (or even if you decide to keep the property instead).
Now, this is the big one that you always hear about in the television and radio adverts, “release the equity locked in your home”. But what exactly does this mean, is it just more big, fancy sounding words? Well, in effect, what it means is that you can arrange with a company, who specialise in these matters, to receive a payment in exchange for your home. Now, this does not mean that you are selling the house. In fact, you can remain in your home until you pass away, and it the ownership of the house then passes over to the company. This is a desirable arrangement for many, who would like to live a certain lifestyle, or perhaps have an issue with cash flow, or did not plan for their retirement sufficiently.
This is a wise decision for many retirees, as there are many benefits to downsizing your home. Firstly, our property selling FAQ’s are a fantastic resource for those looking to find out a little more info on the processes involved. So, what are these benefits then? Well, in selling your property in search of a smaller one, you could possibly gain access to a lump sum payment from the difference in sale price for your current home VS the new property that you buy (assuming that you plan to buy, rather than rent – more on that later). And with smaller property comes smaller bills. Common sense dictates that having a smaller space means that your electricity and heating costs should be reduced. And smaller spaces are just easier to heat anyhow. Other costs, such as property taxes, rates, refuse charges, etc. should also reduce in line with the smaller property. This can result in some sizeable savings, which can be truly eye opening when you first see them. Now, there are potential further savings to be had, which leads us to our next point – renting.
There is somewhat of a stigma attached to renting property, alongside a national obsession with ownership of your own home. However, renting is a great idea, for several reasons. For example, let’s say the fridge breaks – it’s the landlord’s obligation to replace it. If this was in your own home, you would be down several hundred in costs for replacing it. You no longer need to concern yourself with replacing faulty electrics, redecorating, etc. And the beauty of renting is, you can move about, as much as you like because you’re not tied to a property. So, if you want to move to a different city or even country, you can, as you are not committed to a mortgage or property that you own – all you need do is see out the lease agreement. If short term leases aren’t your thing, you can arrange to have longer stays in just one place – the decision is yours to make.
So those are just a few tips to get you thinking about some of the possibilities that are available to you, when it comes to retiring, and selling your existing property. Selling your home makes a lot of sense, especially where you have children, and wish to leave them something when you pass. In making the sale, you are removing the burden from them of having to sell the house themselves. You are averting possible arguments that may arise with regard to percentages, and also, avoiding potential taxes that may arise from a Capital Acquisitions point of view. All that’s left is a lump sum that you can split evenly between them as you see fit – after, of course, you have enjoyed the fruits of the sale for yourself. After all - you’ve earned it!