The best retirement plans often need a cash injection, and downsizing can be an effective way to access the funds you need to enjoy this period of your life.
With children having flown the nest, and friends preferring a couple of hours over lunch in a cafe to all-evening dinner parties, many people approaching retirement come to realise they're not using their current property the way they used to, and that, in fact, it no longer serves them. As your home is often your largest source of capital, releasing some of that money to enjoy your leisure years can seem a very attractive proposition.
Downsizing isn't about “settling for somewhere smaller”; it's about finding a property that allows you to create a home that works for the lifestyle you are transitioning into, while paying for you to truly make the most of this new time of life.
When you're considering any move, but particularly when you're thinking about downsizing, it's important to be as honest as possible about what you need from your new home, and what you want from the new life you'll be living within its four walls.
Perhaps you have the perfect number of rooms in your current home, but feel a smaller garden would be easier to manage? Maybe it's the other way around, and you'd be happier with fewer rooms, and a garden you can really get your teeth into – perhaps literally, if you're thinking of enjoying the health and well being benefits of growing your own fruit and vegetables, or perhaps even raising a few chickens for eggs! If you're facing retirement without your life partner for one reason or another, you may be looking for a new home that also offers you a closer community, where you can easily make new friends.
Once you've identified what you want to gain from a downsize, the next step is to find out what your current property is worth. This isn't as daunting as it might seem, so don't let lack of experience derail your plans!
If your current house has a long and cherished history as your family home, you might not even have thought about how much it could be worth. Before you call in an estate agent, an easy way to gauge a realistic figure is to visit online property sites and see what houses in your street have sold for recently; look for the highest sale price first, as this gives you the 'ceiling' for your area – a price that, no matter how well-presented your home is, or what additional features it offers over neighbouring properties, is the very top end buyers are willing to pay for the location. Once you've identified the ceiling price for your street, look for the most common sale price, as this will give you a realistic idea of how much you could get for your own property, which will inform your search for the perfect home and location to downsize to.
Before you call in the estate agents, consider your house from a buyer's perspective; if you're just starting your retirement planning, it could well pay dividends to spend a year or two making sure your house is as attractive to potential buyers as possible. Always get at least three quotes from different estate agents, and include one with a national remit - you never know where your perfect buyers might currently be living!
The best way to ensure your home holds its value is to keep up to date with heating systems, loft and cavity wall insulation, where appropriate, as well as doors, and windows. People are looking for homes that are cheap to run, and energy efficiency is a key part of that.
Keeping up with maintenance and repairs is also time and money well spent. Focus on the external aspects of the property, rather than redoing the kitchen and bathroom every other year – most buyers will have budgeted for replacing these. What they may well try and haggle over are things like external rendering, repairs to garages, roofs, and outbuildings, and gardens that visibly require a lot of remedial maintenance.
Inside, ensuring that your home is kept clean and fresh, with nothing too dated, should be sufficient; kitchens and bathrooms don't actually add as much value to a property as many people assume, as long as they are modern, attractive, and functional.
When you're selling your home, the most important thing to bear in mind is that prospective buyers want to be able to imagine themselves living there. They want to be able to visualise how their furniture would look in the rooms, and to see how easy it would be to put their own personality onto the property.
Choose light, neutral colours for walls and carpets. Accentuate surfaces with a few suitable, neutral objects – cheerful framed photographs on a mantle piece, a vase of flowers on the coffee table, fresh fruit in a contemporary bowl on the kitchen counter. You're aiming for 'curated lived in', the impression of normal family life, without clutter.
Finally, the big day dawns. You've got a firm sale, the deposit's in the bank, and you've found the home that will allow you to enjoy your retirement.
The next step is to look at your possessions. What can you make a pleasant new home without? What haven't you used, looked at, or worn in the last year? What isn't really your style? What do you anticipate no longer needing? Aim to sell those possessions, rather than give them away; this will provide you with cash in hand to decorate your new home to your taste, without eating in to any money you made from the sale of your previous house. That money, whether it's five thousand and thirty-five thousand, should be kept intact, to allow you to enjoy the retirement you deserve.
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