Tips for investors wanting to downsize

Tips for investors wanting to downsize

Downsizing isn’t just about selling up and buying a smaller property. If you make the right choices, you can achieve good returns on your investment, and find a wonderful place to call home.

Here’s what you need to know.

Why are you downsizing?

It’s important to know why you’re downsizing before you make any moves. Your motivator needs to be at the core of every decision you make, so you achieve your goals and live a happy life in your new home.

Consider the following.

  • Are you downsizing to for financial reasons? For example, do you want to save on home maintenance costs so you can travel a few months every year?
  • Are you downsizing for practical reasons? Because the kids have left home, and you’d like a more suitable space for your needs.
  • Are you downsizing to be in a better location? To be closer to the city, the ocean or a particular hub you love.

Now you know, what’s next?

Now you have a clear idea of why you’re downsizing, be sure to explain your motivations to your mortgage broker and your real estate agent. In both cases, this should help them provide you with more tailored solutions.

For example, if you’re downsizing with the intent to lower on going living costs, your mortgage broker can tell you if your new loan aligns with your goals, and your real estate agent can look out for properties that cost less than the property your selling.

A good agent should also consider the fees, rates and other charges that apply to a property, so you’re not caught out.

Low maintenance

Many people who downsize do so because they want to spend less time and money maintaining their property. If this is the case for you, consider the following factors when assessing if a new home is right for you.

  • How big is the property?How many rooms do you really need? Would you go stir crazy in a one-bedroom apartment, or do you love the idea of minimal cleaning? Work out how many rooms would serve your lifestyle. 
  • Do you like or loathe gardening? If mowing the lawn is the bane of your existence, consider a property that requires minimal gardening. This will make it easier to leave, if you want a long holiday, and means less upkeep.
  • Where do you want to be? If you love the ocean, would it be worth living closer to it, and paying more for a smaller home in a prime location? Consider what lifestyle would make you feel what you want to feel.
  • Is it accessible? If you hate stairs and want to downsize to an apartment, make sure there’s a lift. If your new place is far from amenities, is it accessible by public transport (if that is your mode of choice).

Smaller is not always cheaper

Most of all, know that smaller does not necessarily mean cheaper. If being close to bustling hubs matters to you, then be sure to consider the long-term impact of moving to an isolated spot, just because it’s cheaper.

If your standard of living is going to take a hit, perhaps it is better to save less, and be more central. After all, your happiness matters!

Get a good mortgage broker

Even if saving for your nest egg isn’t your prime reason for downsizing, it makes sense to maximise your savings.

A good mortgage broker will help you do this, by researching and tailoring a loan that saves you more. We compare hundreds of different loans, and then pinpoint one that matches your specific goals.

We don’t just look for a loan with low interest, we also assess whether a product has low fees, so you’re not caught out by hidden costs.

Get started now. 

Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.