The Finance Blogger


Should I Downsize to a Bungalow

Downsize to a BungalowDownsize to a Bungalow? Lot’s of baby boomers are thinking about whether they should stay where they are in their current homes or downsize to a bungalow.  There can be a number of legitimate reasons why you want to downsize, however saving money is probably not one of them. It just costs way too much to move and pay real estate fees etc unless you are downsizing to a much smaller home. Lot’s of people assess this situation every day and wonder what is the best position for their personal situation.

Downsize to a Bungalow – Issues

We will discuss this point in a moment, but first here is a list of reasons many people think about when they are thinking about downsizing and some actually do it.

  • A house without stairs
  • Less Yard work
  • Change neighborhoods
  • Life Style change
  • Avoid major maintenance issues
  • Health issues
  • Trying to reduce monthly costs
  • Just the urge to move to avoid memories

When you downsize to a bungalow you meet several of these objectives for moving.  No stairs, usually a smaller lot so less yard work, but not always and usually seniors like bungalows so there are like minded people around the area. Sometimes it is better to move than put a lot of money into an existing home. If you have serious health issues you may be forced to move out of your home also into a seniors home where there is more support available.

Downsize to a Bungalow – Economic

Moving for economic issues is a really tough one and unless you are downsizing to a much smaller home in another  neighborhood into a less desirable area, you may not save that much money.  Issues to consider in your assessment include:

  • Real Estate Fees – 5 to 6%
  • Legal fees
  • Moving fees
  • Taxes depending on your area
  • Property taxes
  • Heating and cooling costs
  • Landscaping if a new home
  • Updates to an older home, repairs and remodeling
  • Even with a new home, there are many upgrades to consider

All of these costs can really mount up so you need to be very careful in making your decision to downsize. Personally I would rather put all of this extra money into upgrades and improvements to my own home instead of paying all of these expenses to move to another home. Every situation is different, so you will need to develop costs associated with each and then make your decision based on the economics and emotional issues that you are dealing with.

Complete Your Own Calculations

Everyone must do their own math and take into account their financial circumstances. If , for example , you are paying 5% real estate fees on a $100,000 home that you are selling, that is $5000 along with legal fees to sell your current place and purchase another, say $1000 you now are spending $6000 in total.  Add to that the cost of moving, which might be as low as $100 to rent a truck for a day or much more if you hire someone to pack and move your things, adding several thousand dollars extra.

Then there is the redecoration, remodeling and landscaping. This could amount to nothing or be many thousands of dollars. Although it is usually not nothing, some people can get away with not spending too much money.  This is very personal to each couple, so make sure you discuss this with your spouse before you decide on how much to budget for this area.

If you love the area you live in,  then spend the money on your own home. If you have trouble with the stairs, install a stair lift. Everyone will be much more comfortable in their own home that they know and love. While some people prefer to move to another city that they have often thought about visiting. Then there are those that move to be with their kids or they move to be closer to family, especially if older members need support. Everyone makes their decision for a variety of reasons and they do what is right for them.

The intent of this blog is to encourage readers to also assess the real cost of downsizing to a bungalow or any other home. Good luck with your decisions! For more information about down sizing your home, click here.

 

 

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2 Responses to “Should I Downsize to a Bungalow”

  1. we have decided to stay were we are and enjoy the home we have lived in for the past 25 years. We love the home, the street and the neighborhood. So why would we move. Besides these new homes, while nice, cost a lot more and you spend a lot of money moving and decorating.

  2. Everybody we know is trying to figure out what to do about down sizing. They do not need the big house any longer and want something smaller.

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