It’s no secret that homeowners are always looking for more ways to save money.
The average Sydney homeowner spends around $3000 on their mortgage payment. Of course, this varies drastically from suburb to suburb due to differences in property prices and when the property has been bought.
Real estate experts are predicting that the prices of homes will rise gradually in 2020. They’re also predicting that, despite price jumps, more houses will be up for sale by the end of the year.
Just because more and more homeowners are looking opportunities to downsizing.
But why is moving to apartments or units the best option for many families? In this article, I’ll explain the main benefits of downsizing.
The following benefits could ultimately mean more money in your pocket – and so much more!
1. A Smaller Home Means Reduced Costs
Mortgage payments typically factor in a number of things.
The property type, its location, and the economy affect mortgage rates. Your personal credit history and the loan you secure can also affect your mortgage rate.
Smaller properties that cost less have lower mortgages. Which makes this the obvious reason why downsizing is a viable option for homeowners.
You’ll likely pay less in property taxes, as well as insurance. You’ll pay even less if you live in areas where the cost of living and property values are lower.
2. More Money In Your Pocket
The ultimate goal of downsizing is to save money.
By living in, you can significantly reduce your monthly bills and living costs. You can then use this saved money any way you please.
Some homeowners put the extra money towards buying an investment properties to look at building a property portfolio to earn passive income over a period of time where if done correctly you could potentially be replacing your active income with passive income, up course like any good thing in life will take some effort time and perseverance.
3. Fewer Utility Costs and Maintenance Costs
Most homeowners who downsize not only have smaller mortgage payments to worry about. They also enjoy having lower monthly utility bills, maintenance costs and reduced living costs.
A smaller house means there’s less space to heat up and cool down. Which means that you’ll use your heating and air conditioning system less.
A smaller house also means fewer lights needed to illuminate your home. So you’ll have smaller electricity bills.
You might would have also noticed that if you’re house is older than 20 years you would possibly be spending roughly to $6000 to $8000 yearly purely on repairs and maintenance. When moved to a new unit / apartment you would be paying strata but you need to keep in mind usually 1/3rd of what you pay would be contributed towards sinking fund for future building repairs and maintenances. Which is still lot better than spending $6000 to $8000 yearly and lot more secure than a house.
4. Less Stress & Better Quality of Life
Smaller homes tend to have smaller properties. The less property you have, the less maintenance you’ll have to worry about.
This not only means you’ll spend less on water for your lawn. You’ll also have less yard work, fewer repairs, and fewer renovations to care of.
All in all, you’ll have more time for the things you love. Top that off with more money to spend or save, you’ll live a less stressful lifestyle overall.
5. Reduce Clutter & Find True Happiness
With less space, you’ll have less room for your belongings. By downsizing, you’ll have to get rid of things that you don’t have room for or have no purpose for.
This may seem like a disadvantage. After all we as a society has long emphasized the importance of having material things.
But in a world that’s mired in economic strife, as well as the threat of climate change, minimalism is on the rise.
Having less is better for your mind and health. It’s also less stressful and gives you more time and freedom to enjoy the things you want to do.
Plus, having less means fewer distractions. Which means more time to focus on the things you want to do and with the people you love.
Downsizing doesn’t just mean moving to a smaller home. It also means simplifying your life.
6. Smaller Neighbourhoods Mean Stronger Social Circles
Smaller homes tend to come in clusters. Smaller neighbourhoods tend to be more close-knit than larger, or even gated, communities.
Downsizing could mean more for the future of your family. It could mean your children have more friends to grow up with. It could mean you and your spouse have more friends to grow old with.
A bigger house doesn’t always mean a happier family. With less housework to worry about and more neighbours to spend time with, you’ll live your best life.