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Things to Think About Before Downsizing or Selling Your Home1
Here are 5 things to consider as you think through this big decision.
- Does your home fit the lifestyle you want?
Do you want to travel...live close to your grandkids...open a business? Do you have the time and energy to maintain your current home and yard, if you have a yard? Knowing how you want to spend your days can help you decide the type of home you need and where you may want to live.
- How much space do you need?
If you downsize, are you willing to part with some of your stuff? If not, you may need to pay for storage, which can get expensive. Also, if you have frequent houseguests, would downsizing make it harder to entertain?
- Do you want to own or rent?
If you're expecting a comfortable retirement income, buying your next home may make sense as it gives you a future financial cushion. But, if you need the cash, renting could possibly free up funds from the sale of your home to cover ongoing expenses.
Check out the Right-Sizing Case Study for more things to think about when deciding whether to rent or buy.
- How much will moving really cost?
Selling your home and moving will include closing costs, real estate commissions, land transfer tax and more. Before you bank on using all of the money from the sale to fund your retirement, know what a move will cost, and set aside the funds you'll need.
- Will your current home work for the next 20 or 30 years?
Can you imagine being comfortable in your current home when you are 70, 80 or even 90? Will your home—or the neighborhood you live in—still fit your needs if you can't climb stairs or drive long distances as easily? If you’re not sure, you may want to carefully consider your future needs.
What to Check out Next
Right-Sizing Your Home Case Study: Sophia and Raj
Five Tips for Soon-To-Be-Snowbirds
Client Story: Downsize and Down South
Let’s Start the Conversation
Legal Disclaimer1)
These tips are intended as general information only and are not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.
Financial planning services and investment advice are provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.