As a child of elderly parents or other loved ones, you should also consider this to plan ahead. So the question is, what are the pros and cons of downsizing your home? Before we list them, I would like to tell you a secret. Don’t wait until the last minute to discuss this both with your spouse and with your elder parents! Because an opening came up in an assisted living center for my parents, they had to sell their home immediately. This meant a frantic search for a real estate agent, movers, getting things packed, throwing things out, moving things again into the assisted living area—these things can be very stressful, especially on your elder parents, as it was to mine. Luckily things turned out quite fine, thanks to my sister who took time off from her job halfway across the country, and a few good neighbors who helped us pack.
Let’s get back to the point. Pros and cons: Identifying these is easier than answering the ultimate question: should you are shouldn’t you recommend this to your parents?
- Your parents may even have the opportunity to move to their dream place, a warmer, or cooler climate.
- This may be their chance to get away from an old home requiring repairs, or from a neighborhood they no longer like.
- There are immediate and long-term savings, both economically and in terms of time.
Savings- Your elder parents can probably save money on many things
- Mortgage payments: will be less with a smaller home.
- Property taxes:
- Will be lower with fewer square feet.
- In addition to no school-aged children, your parents won’t necessarily have to move to a comparatively more expensive school district, and taxes could be improved.
- Maintenance costs could potentially be less with a smaller home.
- Utility bills will probably be reduced unless they move into a very old home with poor insulation or old, drafty windows.
- They will have more time for themselves, with less to clean, less to garden, and more time for hobbies and other fun.
- In community-oriented areas, they may end up with more amenities, such as a health and fitness center, a pool, a dog park, an exercise area, or a tennis court.
- They could make a good profit on the sale of their original home during an up-market. In addition, if the market is exceptionally good, some buyers won’t even ask for home improvements.
Transportation- Again, potential savings in time and money come into play:
- In addition, your elder parents might be able to move to an area with better local transportation, such as a subway, which allows you to depend less on having a car, which is quite costly in itself.
- The commute time can be much improved now that your elder parents won’t have to live strategically close to their previous jobs.
Moving is probably one of the most stressful events in life and can be hard on elder people especially. That’s why it’s so important never to wait until the last minute to do this. When you wait, your parents may be more apt to settle for a lower asking price, more apt to shop less for movers, more apt to throw out things while packing they’d regret later…the list goes on.
- Some homes are large enough to rent out extra space such as on Airbnb. That is, your elder parents may miss out on some opportunities to make money.
- Smaller homes could mean less space for relatives, kids, and grandkids when they visit.
- Sometimes in down-markets in particular, one might have a loss on the sale of the original home and actually pay more for a smaller home in a more suited neighborhood.
- Your elder parents will have to throw away a lot of sentimental items just so everything fits, not to mention having to switch furniture if it’s too large.
- Your father might lose his “man-cave” or garage where he kept all his prized possessions (like his tools) and your mother might lose her sewing and crafts room, something they prize.
- They could lose a typical subdivision backyard and settle for a single view of a crowded street instead.
- Depending on the sale of your home, there could be tax consequences. Your accountant and real estate agent would need to help you with this.
- Your parents potentially could lose the privacy of a suburban home if they instead move to a more metropolitan inner city area.
- Likewise, retirement communities, for some, may not be as fun as having their own home, with the chores one even looked forward to doing, like gardening. Finding new things to do can be a challenge.
- Loss of old friends in the old neighborhood, and likewise having to make new friends in the new neighborhood.
- Loss of “prestige”: getting their dream home was hard work for your parents, something they were proud of. Moving to a much smaller home, in addition to all the other negatives, is one more reason for the mixed feelings many people may have in downsizing.
- The chance of having to give up a pet due to size constraints could occur.
- Relocation costs can give some quite a sticker shock depending on the last move they made. If they depend on the movers to do most everything, this could represent up to a sizeable percentage of the price of their home.
- Closing costs, real estate commissions and fees can also eat up some of the profits, so much so, that one may even end up owing money. But this will depend on the amount of equity they have in their home.
We also have not discussed the possibility of moving in with your adult children, which has its own plusses and minuses. Again, planning ahead is of utmost importance, and should be done with all parties involved.