Downsizing is a decision people often relate to bad financial conditions. On the contrary, there are numerous reasons people move to a smaller space than manage their finances. Nevertheless, it is an important decision because of the immense impact on your lifestyle.
You cannot move because of an impulsive decision to live in a new neighbourhood. You can use the extra space as parking for a new car if you take out car loans for bad credit. And, there are numerous alternatives to solve your financial problems.
Answer the Why Before Downsizing
From the above paragraphs, you can understand the importance of a solid reason to fixate on the decision to downsize. You cannot make a massive change in your life without a good enough reason. Therefore, take your time to answer the inescapable question of “why are you moving out?”.
Moving out will involve many expenses and tasks to cause inconvenience in your tight schedule and budget. Thus, you should find an alternative solution to your problems that will require less effort and resources. If not, you can go ahead with the process of downsizing after writing down the requirement from the list of problems.
Things to Consider While Downsizing Your House
Downsizing will have an impact on your finances, personal, social, and professional life. It makes sense to make such a huge decision after checking the list of pros and cons. Following are some things to consider before downsizing your house.
1. Return from House Value
Real estate is a safe investment with guaranteed returns in the long term. The temporary market fluctuation may reduce the overall cost for a short period. Nevertheless, the improvement after the purchase should help get a handsome return on your investment.
Thus, prepare yourself to save money if you consider buying a house with the same budget as the current space. In most cases, people get a better home for a smaller space if they want to move to a similar neighbourhood. For the posh neighbourhoods, you might have to get loans for bad credit with no guarantor in addition to the value of your current space.
2. Exhausting Decluttering
Decluttering will help you make money from the unwanted furniture and other items in your house. You cannot move the entire items from your current bigger space to the new home. Therefore, it will require decluttering the items with no purpose to serve.
It can take days to get rid of stuff at a reasonable price. You can give them to a charity to help the underprivileged members of society. Or, you can wait until the products are sold at the online marketplaces and local pawn shops.
3. Less Cost of Living
The cost of living will reduce if you are moving to a smaller space. You will consume less electricity and water to control the utility bills. Moreover, the maintenance cost will also get affected by the limited space in your house.
However, the impact of downsizing doesn’t need to remain positive on your finances. The amenities and essential services often get expensive in a posh neighbourhood. The restaurants will charge more for the same food based on the location.
4,. Cost of Moving
The cost of moving includes many expenses such as transportation, deposit, and renter’s agreement. Thus, the overall cost is a considerable amount if the budget is already tight. It might cost more to downsize than live in the same space if the financial trouble lasts a few months.
The cost will increase significantly if you are buying a new house. You need to put the file charges and repair them on the old property. The current mortgage providers may ask for prepayment charges to close the loan before the agreed duration.
Thus, you cannot ignore the cost of moving as it can create unexpected problems with your financial plan. Consider every cost associated with moving from insurance to application fees of a mortgage. Otherwise, you are up for many surprises to derail the set budget.
5. Reduced Space
For the majority, a reduced space is a serious disadvantage of downsizing. You will have less space to put your belonging or set the layout of the interior. Thus, the creativity will face serious space-constraint while creating an appealing décor.
However, the reduced space is a requirement for many individuals as well. They can declutter the house to live a minimalistic lifestyle. Also, it will have less space to clean and take care of the house if the members have reduced.
6. Distance from Amenities
Distance from amenities is a critical factor while deciding to live in a new neighbourhood. It will not have much impact because of the size of your new house. But the distance will change your lifestyle with significant consequences.
The distance to the nearest supermarket, park and essential stores will define your comfort of living. You may find peace in a locality away from the noise of the city. Nevertheless, it will create problems while travelling for at least an hour to buy groceries.
More importantly, you should consider the commute to work. It makes no sense to add another hour of travelling to your packed schedule.
Try the Space
You can try to live in a small house with the options like Airbnb for a test run. It will help you save substantial money if you are not comfortable with the downsizing. If not in the same neighbourhood, you can find a space to rent in a nearby location with the space of the same size.
To sum up, downsizing is an important decision where you should consider the different aspects and impacts. It is a major change in your lifestyle that can cause serious consequences. Or, you can save money and live a less stressful life in a space perfect for your requirements.
Whatever is the outcome, it won’t hurt to try living in a smaller space before moving out. You can always get financial support with bad credit and no guarantor from a direct lender as an alternative to downsizing.