If you are tempted to save some cash and create a little nest egg for the future, you might be tempted to downsize your home. This massive asset that you own is a burden around your neck. If you are spending a small fortune every month on your home loan repayments, you may need to consider decreasing your outgoings. Alternatively, by swapping your large pad for a smaller and more humble abode, you can decrease your mortgage and enjoy more disposable income. Take a look at why downsizing could be a sound financial decision for you.
Equity
Downsizing from a property that you have built up equity in will leave you with a healthy bank balance once you have downsized. This large amount of cash sitting in your bank account post-downsizing could empower you to travel, start a business, or simply save for a rainy day. Thinking about your twilight years also needs a cash injection to prepare for your future. Equity being released means that your money isn’t tied up in a large asset. You may even find that by downsizing, you have enough equity that means you can buy your next smaller property outright without the need for a home loan. This could leave you mortgage free meaning that you have an asset that is yours and your alone!
Lifestyle
You may leave in a large detached pad in the middle of suburbia or you might live in a home that has spare rooms that you no longer use. If you are tired of living in an echoey property and you seek a more vibrant community to be part of, downsizing can facilitate this. Think about checking out the garden Brickworks apartments, designed by renowned architects that are the embodiment of modern living. With like-minded individuals, you can feel part of a more exciting and inspiring community. Living in silo will be no more as apartment living tends to be more communal.
If an apartment doesn’t sound like your thing, consider venturing to a two bed condo, a terraced home, or a smaller version of your current dwelling. This gives you a chance to declutter from your current pad and take with you only those items and sentimental things that mean something to you. A smaller pad doesn’t have to squeeze in all of your current belongings and gives you a chance to detox materialistically.
Ongoing Costs
Living in a smaller property naturally means that your pad takes less time to heat up in the winter and requires less upkeep financially. Having a smaller boiler is cheaper, you may be able to implement greener energy saving initiatives, and you could find that your garden and exterior costs less to maintain. Less ongoing maintenance means that your finances are freed up and your time is less shackled to your pad. A smart thermostat needn’t cost the Earth to install and could save you a small fortune in an apartment or small condo.
If you are keen to downsize, assess all of your options, and make a decision based on your financial needs and wants.
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