DOWNSIZERS: TRADE YOUR SPACE FOR BETTER LIVING
In a previous article (Downsizers: How And Why You Should Think About Downsizing), we talked about the subjective benefits of downsizing.
The advantages are many, and include the freedom and serenity afforded by an uncluttered life, the opportunity to create deeper meaning through simplification, and the time gained by stripping away the nonessentials to focus on the things that matter.
Plus, the many health benefits a less encumbered and more connected way of life offers us, and the chance to finally pay attention and fulfill the personal dreams we’ve had to postpone while raising a family, provide an immeasurable degree of quality of life that could not be fully enjoyed before.
But downsizing has many financial benefits, too—perhaps none richer and more rewarding than to finally cash out on the enormous appreciation in value experienced by the Bay Area housing market for just the past ten years. With annual percentage gains in the double digits, it has been a fabulous decade for homeowners.
When Is The Right Time To Downsize?
“Is now the right time to make a move?” clients are asking us with greater frequency.
Savvy and successful investors question this every day and share a common secret: they know when to cash out.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
– Warren Buffet, CEO of Berkshire Hathaway and fourth wealthiest person in the world
While we are not suggesting a dip in home prices is in the near horizon, if you are approaching retirement or are already an empty-nester, we believe the moment is ripe to consider a smart move. Appreciation in many of communities of the Bay Area is at record highs. Julie and her team can run a comparable market analysis on properties around your home and let you know what kind of return you can expect if you listed your home on the market.
How Can Downsizing Help You Financially?
Downsizing will not only allow you to reap significant gains in home equity, but will free up cash thanks to lower mortgage payments, property taxes, and maintenance and insurance costs. With your treasure chest thus filled, the possibilities are endless.
Some homeowners have turned the tables on downsizing by utilizing the extraordinary profits made possible by rising Bay Area home prices. In turn, they can purchase larger and more luxurious homes in more inexpensive areas out of state, or afford a grander lifestyle—on a reduced scale—in their own community or in more affordable neighborhoods nearby.
Does Downsizing Mean You Should Give Up Homeownership?
Just because you’re downsizing doesn’t mean you have to surrender homeownership forever. Many downsizing sellers have reinvested their proceeds into other homes. Some have downsized to purchase a second home overseas, or back home, as in the case of immigrants who long to renew their connection with their places of birth and with the family members and friends who stayed behind. Helping children with a down payment for their own home has been another factor motivating families to downsize.
In previous cycles, savvy investors have also cashed out near the peak, then downsized (or moved temporarily into a rental) to wait for a price correction. They entered the housing market a second time once certain a new upswing was underway.
Can We Help?
Whatever your circumstances, investment strategies, or long-term goals, let our experienced team help you capture the many upsides of downsizing and to guide your next move toward a richer and brighter future.
For more information on how we can help with your downsizing needs, please contact Julie at 650.799.8888 or Julie@JulieTsaiLaw.com to schedule a free consultation.