Downsizing is when someone moves into a new home which is smaller than the one that is currently lived in. People usually downsize when their children have left home, and they have more room than they know what to do with; when they get older and are struggling with the upkeep of the property; or when they can no longer sustain the costs of living in a larger home. Many homeowners are now looking to downsize in 2020 because of the recession on the horizon as a result of the coronavirus pandemic. But is this genuinely a viable way to save money on housing costs during a financial depression? We’re going to be diving deeper into this question in our article, so we encourage you to read on if you’re wondering how to save money in preparation for the upcoming recession.
Selling
Properties usually decrease in value after we’ve lived in them for several years, which makes people reluctant to sell them as they don’t want to lose the money they originally invested. However, this also means you’ve likely already paid off or have very little left to pay on your mortgage. If you’re moving into a smaller and more affordable property, this means you’ll actually have some equity from your old home, which you can put into savings. You might even be able to buy your new property outright with this money, so you no longer pay a mortgage. Owning your property means you’re completely financially secure, and you never have to worry about losing your home during a recession.
Bills
The bigger your home, the bigger the price of your bills. For example, your council tax band is higher depending on the price of your property, so downsizing into a cheaper home means you would have to pay less council tax per month. Let’s not forget it’s more expensive to heat a big house than it is a small one because the greater surface area makes it easier for heat to escape, decreasing the energy efficiency of your home. We all know this results in greater gas and electricity bills.
Belongings
The main disadvantage of downsizing is not having enough room for the belongings you’ve accumulated over the years. These things often have a lot of sentimental value. Plus, collectively they’re expensive – giving them up would incur a big loss. However, there are plenty of options for homeowners who are downsizing and don’t enough room for their belongings anymore. For starters, you could hire a removal company which will buy your old furnishings off you, providing a profit for everyone, helping to mitigate the losses of giving up belongings. There’s also the option of hiring a storage unit. These are ideal for those who don’t want to lose their possessions but also don’t have enough space in their downsized property. Check the costs of storage and you’ll likely find a cost-effective option that is going to suit your needs.
Moving
Everyone knows that moving home, even when downsizing into a cheaper property, is expensive. As we approach the financial recession, can we afford these additional costs? Yes, because there are plenty of ways we can reduce the price of moving. Once again, storage units are ideal because they can act as a halfway house for your belongings whilst you’re in between houses. Also, avoid using expensive moving companies where you can and instead employ friends or family to help you move smaller furnishings.
To conclude, downsizing is absolutely a viable way to save money on housing costs during a recession. Use smart solutions to avoid unnecessary costs and you can reap all the benefits of owning a smaller property. Thanks to Safestore for consulting
