What Do You Need to Think About When Downsizing?

/ Bondi Beach Astra/

There are many benefits to downsizing, but also plenty of things to consider when deciding if it is the right move for you. This is by no means an exhaustive list, but we hope that it will give you a firm foundation for starting on your downsizing journey...

  • Pros and cons of downsizing:

    • More upfront capital from selling your larger home. The Retirement Village model of 99 year leases even removes stamp duty from the equation. When buying into a Retirement Village lease, you do not pay stamp duty on entry, but you do pay a departure fee (also known as a Deferred Management Fee) on leaving the property. Although having more money may affect your Aged Pension (please check with your financial advisor if this could be an issue for you), having upfront capital allows you to control how you live your life now and allows for better planning for the future.

    • Fewer ongoing costs and improved cash flow. Utility bills, insurance payments, council rates and other ongoing costs are often lower in smaller properties. This could free up money to invest, spend on goods and services, or save for a rainy day. Importantly, many retirees want more financial security for the future, knowing they may have less money coming in then.

    • Differences in space and flexibility. Living in a smaller home may mean you have fewer rooms and less space for entertaining than you are used to. However, smaller homes are generally much easier to maintain and clean, and downsizing might mean you have fewer areas in your new home that are unused or under-used. You also might not lose as much stuff!

    • Fewer material things - many downsizers will use their move as an opportunity to declutter and throw away, or sell, their unwanted things. And since there is plenty of evidence that decluttering is good for your health as well as your wallet, this could be beneficial on several fronts.

    • Emotional connections and memories. Often, when people are considering downsizing from their family home, they fear losing all the memories and emotional ties that go along with that home. It can be daunting to make the break, but don’t worry the memories come with you and you will make a connection to your new place or neighbourhood quicker than you think. The saying “a change is as good as a holiday” exists for a reason, and there’s nothing like making memories in a new place when it’s the right fit for your next phase in life.

    • More convenient. You can choose a layout and fittings that better meet your needs, or a location closer to family, transport and services.

  • Financial considerations:

    • Selling your existing property (marketing costs, agent’s fees, conveyancer, other legal fees)

    • Financial advisor consultation

    • Moving costs - furniture removal etc...

    • Cost of living in your new area

    • Reduced repairs and maintenance costs

  • Do your research and decide on what’s most important for you:

    • What are your financial goals?

    • What are your future plans, or what would you like them to be?

    • What are you hoping to gain from downsizing?

    • Are you currently spending your limited time doing things you WANT to be doing?

    • What are the available amenities in the new place, and will you feel safe and connected?

    • What are your needs for personal space, visitors, storage?

    • What do you like about your home?

    • What could you do without?

    • How many rooms do you need?

    • Do you want to move somewhere calm and quiet, or busy and populated?

    • Do you enjoy walks by the beach, shopping in city centres, or spending time in national parks?

    • Are there any particular amenities that you want or need close by?

    • Make sure to give yourself plenty of time to research and do everything you need to do before you have to move. If it seems like downsizing might be a good move for you, hopefully you will see it as writing an exciting new chapter in your life story. So before you start you should make a draft, a blueprint you can use to ensure your move will go as smoothly as possible.

  • Who to consult about making a move:

    • Family and friends

    • Legal advisors

    • Financial advisors

    • NSW Fair Trading (they have a handy guide to your rights and responsibilities).

Please make sure to speak to a financial advisor and/or a solicitor before undertaking any big financial decisions. If you have any further questions about Retirement Village living in general, or Bondi Beach Astra specifically, please ring or email, or visit our FAQs.