According to the most recent TD Canada Trust Boomer Buyers Report, many boomers plan to move as part of their retirement strategy, with nearly one-third downsizing. This strategy may include trading in the larger family home to a smaller condominium. This can be an exciting experience and it can save you a lot of money. The most likely candidates for this move are empty-nesters, retirees and those looking for a maintenance-free lifestyle.
Whatever your reason for downsizing here are some tips to lower your costs:
Make Your Condominium Amenities Wishlist
Before you start looking for a building, make a list of all the must-haves in your new condo, including the conveniences you'd like included. Keep in mind your fees go towards the upkeep of the amenities. The most expensive are those with pools and underground parking. If you want to keep your maintenance fees low, stay away from buildings that have lots of these expensive extras.
It does matter when it comes to condo fees. The smaller the unit, the lower the fees. Maintenance costs are based on the square footage of your place. Also, a larger building with many units is able to keep costs lower.
Host An Open House Sale
Downsizing means just that - getting rid of big bulky furniture and items you no longer need. Rather than posting unwanted furniture on buy or trade sites, try an open sale in your home. You can stage a few open house events and place labels on all the items you want to sell. See it as a more refined version of the traditional garage sale. It’s less complicated and keeps your precious items away from the outside elements. You can advertise the times online and in your neighbourhood, just as you would a garage sale. Also, let your realtor know you’re downsizing and some items are for sale. You never know - some home buyers might like the idea of moving into a place that’s partially furnished.
Reduce, Reuse, Recycle
After the sale, you may still have bits and pieces you don’t need. Do a once over of everything you have, and imagine them in your new place. Ask yourself; does this table make sense in a smaller space? And do I need all these vases? Throw out what you don’t need, donate what you can and put aside things you will use. Keep in mind you may not need as many dishes, towels or other everyday items. Use online sites like Craigslist and Kijiji to sell things that are in good working order.
Reassess Your Insurance
Now that you’re moving into a smaller place, you may need to make changes to your insurance policy. Often insurance rates are lower for people living in a condo. Some insurance is often covered in your maintenance fee i.e. for the exterior of the building or the common areas. You may only be required to take out tenant insurance to reside in your condo.
It's Time For a New Financial Plan
Downsizing can bring dramatic change to your financial circumstances, and it's smart to reassess your economic situation. Sit down and devise a plan that will realistically show how much money you will require. Be sure to include maintenance fees, utility costs, loan payments and property taxes. Also calculate how much money you expect to receive every month from your work pension, government pension, investments and any other resources. This simple planning will give a good idea of how much you have to spend on recreation and help you manage your money in your golden years.
Remember - avoid buyer’s remorse by rushing into a sale. Take your time to get what you want. Many retirees will find by downsizing, their costs decrease significantly giving them more money to enjoy their much-deserved free time.