The five most surprising hidden home downsizing costs can easily pop up and sabotage your plans. Many homeowners believe by downsizing, they will necessarily be saving money. After all, a smaller house means less space to cool and heat, less maintenance, and a smaller property tax obligation. While this is true for the most part, there can be unplanned, unexpected expenses which reach into your wallet. But, if you know the five surprising home downsizing costs, you’ll be better prepared and avoid them.
5 Surprising Hidden Home Downsizing Costs to Consider
If you want to sell your big house and speed up the real estate closing process, to downsize and enjoy less time keeping your property clean, you should know that it doesn’t always smoothly. There can be added expenses which most people just don’t take into account. Sure, they plan for their new lives in a smaller space, but the transition can bring extra costs. One such cost comes in the form of time.
Sure, downsizing should save you money. Whatever may have spurred the urge to purge—whether it’s kids flying from the coop, a desire for a smaller place to maintain, maybe even an unhealthy addiction to “Tiny House Hunters” on HGTV—moving into a smaller place can grow your nest egg right at a time when extra cash will come in handy. The payoff can be big. But here’s the dirty (little) secret about downsizing: It can cost money, too. If you’re not careful, some nasty expenses can creep into the picture and drain whatever savings you were hoping to accrue. —Realtor.com
If you are selling a larger home to downsize to a smaller property, you’ll want to market your house right. Avoiding listing photo mistakes is one way to help yourself attract more interest. But you should do more than just that. Have your home staged because that gives it the potential to spend less time on the market and also the potential to see for more money. Additionally, don’t get caught off guard with the following five surprising home downsizing costs:
- Repairs to sell. You know all those “little things” you’ll eventually get to fixing around the house? Well, if you want to downsize, “eventually” becomes the here-and-now, right away. Buyers will notice every little detail and surely will scoff at all problems they see. All those little things add up to a lot of buyer objection, who will be turned off and continue their house hunt elsewhere. Fix those things now or experience a whole lot of grief later.
- Storing your stuff. By its very definition, downsizing means moving into a smaller space. And that means less storage space. If you really need to hold onto everything in your current, big house, be prepared to pay for storage for many months to come. That is, unless you’re willing to pare down your possessions to avoid having to rent additional storage space.
- Moving expenses. Going from big to small means moving all that stuff. And it’s well-known the more you move, the more it will cost to do so. However, if you lighten the load, you won’t have to haul all those things from one house to another. Also, consider what you can move on your own, to reduce the expense of moving.
- New costs. Just because your new place will be smaller doesn’t mean your overall monthly costs will go down. New expenses like an HOA fee, higher cost of living, and more, might all be or partly be a factor.
- Capital gains tax. Perhaps the largest expense of all downsizing entails is the dreaded capital gains tax. Consult a licensed, experienced tax professional about the tax consequences in regard to capital gains and more.
If you are considering downsizing and buying a home in Orlando, contact us for the latest market information. We’ll also provide you with the right advice to find a house quickly and for the best price.