Choosing a smaller home can mean a far fatter wallet
For one reason or another, you may find yourself in the situation where you have to change residences, but remember that downsizing does not necessarily have to be a negative experience.
There are two main reasons that could prompt you to sell your home in favour of a smaller place:
The huge house with a pool and four bedrooms would have made sense when you had a large family with kiddy parties morphing into boisterous teenage gettogethers. However, once all your little birds have flown the coop, the large family home may start to feel a little too large for comfort.
It is often at this point that parents opt to sell their homes in favour of a smaller place. You could opt to take on a tenant, but larger properties are more expensive to maintain and a smaller, lock-up-and-go property is often a better and cheaper choice in the long run. A number of families are opting to rent out their large homes while they move to smaller, more affordable properties with lower running costs.
When you plan to buy a property and assess its affordability, you should always build a buffer into your calculations. This ensures that you will be able to meet your mortgage repayments even if interest rates rise. Often, buyers are so caught up in the excitement of acquiring a new home that they fail to consider this important step in their calculations and are then forced to sell their homes when they can no longer afford the repayments. If you are financially stressed, downsizing can help you redefine your financial situation by reducing your mortgage or rental repayment. These are some of the factors you should consider:
If you are downsizing for financial reasons, look at the public transport network that services the area you’re planning to move to. It will make sense to be near a bus or train station so that you are still mobile without needing to maintain and run a car. This is also a huge bonus if you are later in the fortunate position where you are able to buy a bigger home again and can then rent out the smaller property.
When you choose a new home, think about the maintenance costs involved. If you are moving to a property in a complex, find out who is responsible for garden maintenance upfront. Also remember that face-brick homes are cheaper to maintain because they do not need a new coat of paint every few years.
Other maintenance costs, such as a pool in the complex, are also shared, which means you can enjoy the facility with much less strain on your pocket. A lift in your building may mean more convenience, but it also equals more costs. Rather look for a smaller building that does not require a lift. Eunice Sibiya, the head of FNB’s consumereducation division, says you may have to install additional security features, such as security beams and burglar bars, and these upgrades do not come cheap. However, some landlords may fork out for these costs upfront to secure a “good” tenant.
You may also find that additional security measures are planned by the body corporate. Find out upfront, so that you know which costs to factor in.
“Tackle the most important expenses first, and put your DIY skills to the test. There are helpful magazines and television programmes that give gardening and renovating hints and tips,” advises Sibiya.
As for the installation of your TV and sound appliances, take photos of where all the cables plug in so that you can just replicate this in your new house – there is no need to pay someone to do it for you.
“Make a list of the most important additional expenses first and compare this against what you are able to afford at the moment. Remember, creating a home is not an overnight process; it takes time,” says Sibiya.