The Pros and Cons of Downsizing

The Pros and Cons of Downsizing 

Chicago is full of properties that suit every taste – sleek and rustic, modern and charming, large and small. In a lot of ways, this makes Chicago the perfect place to consider downsizing; in our unique housing market, you may be able to find a great deal on a smaller place, without having to give up any of the perks of city living.

Considering downsizing? Whether you’re a retiree looking to make a major lifestyle change or a millennial trying to go green, there are all sorts of reasons to take the plunge.

But how do you know downsizing is the right move for you? Here are the important pros and cons to keep in mind:

Pro: Downsizing Can Help Save You Money

Living in fewer square feet can really help save a lot in the long run. In addition to smaller mortgage payments, a move to a smaller home often comes with a drop in utility costs, such as heat and electricity, in our experience. A smaller property may also mean smaller insurance payments and property taxes, as well.

And cutting your bills isn’t the only financial advantage of downsizing…

Pro: Downsizing Can Open Up New Opportunities to Invest

Shifting to a smaller home also probably means selling your old one, which means freeing up a ton of equity. If you’re like many Chicagoans, then your net worth is probably tied up in your old property; when you sell it, you can turn any profits into new investment opportunities, like diversifying your portfolio or bulking up your retirement plan. Combine these gains with lower housing bills, and you should be able to draw more slowly from your savings and free up some income – meaning that you may be able to take that big vacation, go out for that fancy meal, or start a new hobby.

Pro: It Can Be Easier to Live in a Smaller Home

While it may seem stressful to suddenly find yourself with less space, it can also be a huge relief. It takes a lot less time to maintain a smaller property, for instance, and you may find that your chore list becomes much more manageable with less total ground to cover. If you relocate from a home to a condo – not unlikely in the city – you may no longer be on the hook for tasks like shoveling, raking, or gardening at all.

And while it may initially seem daunting to have to give up or store away some possessions, it can also be extremely freeing to simplify and declutter as you move from one space to another. Never underestimate the value of a clean slate.

Con: Like Any Move, Downsizing Can Be Expensive

Don’t let the smaller size of your new home fool you: All of the expenses that come with transitioning from one property to another – including closing costs, moving costs, staging and deferred maintenance costs, and the costs of storing your possessions or staying in temporary housing – will apply whether you’re upsizing or downsizing.

And while downsizing can offer financial benefits, like the ones described above, it’s important to remember that you’re not guaranteed to be instantly swimming in green thanks to the move. Consider all of the associated costs that come with changing housing. For example, you may be liable for homeowner’s association fees or private parking costs if you move into a condo, extra bills that you never had to deal with as a private homeowner. And always remember to factor in how much your cost of living may change as a result of a move. Will you need to spend more on gas in order to make the same drive to work? Are you moving to a more expensive neighborhood, where the cost of food or nightlife may run you more than it used to? Don’t forget to ask yourself these sorts of questions as you consider making the switch.

Con: Downsizing a House May Be Easier Than Downsizing Your Possessions

Decluttering can be nice, but it can be much easier said than done. You may be on the hook for finding storage for lots of your old possessions; even if you want to just give everything up, you’ll still need to find a way to do so, which may mean scheduling times to talk with appraisers to sell your stuff, seeking out a charity that accepts donations, negotiating with friends and family to take things off your hands, or coordinating a yard sale.

And remember that your new space will be smaller – is your old couch going to fit comfortably in your cozier living room, or will you have to buy something new? Will you be able to make that small bathroom or kitchen work for your needs?

Con: Downsizing Can Take an Emotional Toll

In addition to the practical challenges of getting rid of moving and giving up some possessions, there are always the emotional costs as well. It can be hard to give up the things we have a sentimental attachment to – let alone an entire home. And there will always be a period of emotional readjustment and discovery when you move to a new home; it may be harder to accommodate guests, for example, in a downsized home, and parents may need to adjust to the fact that their smaller property may be less of a central nest for a far-flung family.

Ready to talk downsizing – or upsizing – here in Chicago? Whatever you’re looking for, the Real Group team has the skills to help you get it. Drop us a line today to get started!

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