Downsizing the Home

[chinaco]

When I FIRE... the first order of business, besides a little traveling, is to get the house ready to sell.


We intend to downsize and simplify.


We know what kind of home we want to buy.

But since DW and I intend to do some extended traveling, I am wondering if we should just sell our home and rent a condo for a couple of years while we do some extended traveling.

This might accomplish two goals:

1. Break apart the stress of sell/buy alignment
2. Reduce the risk of leaving an empty unattended stand alone house for months at a time.

Anyone ever rent for a few years after they downsized? What are the pros and cons of this approach?

 

[Corporate ORphan]

We are in the boat though we don't know where we want to relocate.

One other of our concerns is if inflation comes back (our first home loan was at 18%!) If we sell our house now, will the houses go up so that we can't afford another nice one when we are ready to buy

 

[chinaco]

We are in the boat though we don't know where we want to relocate.

One other of our concerns is if inflation comes back (our first home loan was at 18%!) If we sell our house now, will the houses go up so that we can't afford another nice one when we are ready to buy

Yes.

But, we would pay cash for the purchase of the new home, so a loan would not be the risk. But the cost of a House could increase more than expected due to inflation in home cost or construction.

Still, I anticipate the impact to be minimal for the time period (few years at most). Where we live, the cost of a home did not go up a huge amount during the bubble. The IRR on our home was fairly low given the valuation change even at the peak.

 

[rescueme]

When I FIRE... the first order of business, besides a little traveling, is to get the house ready to sell.

We intend to downsize and simplify.

Why?

 

[Midpack]

I'm with you chinaco. We will downsize too, from about 2,300 to 1,300-1,500 sqft (more than enough). Why pay property taxes, utilities and higher general home expenses for space we don't want? We'd rather have a high quality small home than the opposite (Not So Big House, Ross Chapin, etc.).

Our strategy in retirement spending is to get fixed expenses as low as we're comfortable with, that has to start with home, cars & food IMO.

We've begun selling off furniture already. Our new house will not have a living room or a dining room, we've never used either in over 30 years, though we bought furniture for both like all good Americans were expected to!

Still deciding where, Raleigh-Durham is at the top of our list now but still evolving to be sure...

 

[Orchidflower]

I was pretty much in the same boat at the OP, but decided that buying now was smarter than waiting due to the low cost of housing. No idea what it would be in 3+ years, so moved to an area with low property tax which settled the issue.

Maybe some of us just feel more comfortable knowing we have something that's ours waiting for us when we come back to it. I know I do.

 

[Moemg]

We are also planning on downsizing not sure when but we are slowly working toward that goal . Right now Florida is still in a housing slump and I have no interest in giving away my house but hopefully as soon as some of these foreclosures are sold things will improve . I think about 2100 square feet would be ideal .

 

[W2R]

When I FIRE... the first order of business, besides a little traveling, is to get the house ready to sell.


We intend to downsize and simplify.


We know what kind of home we want to buy.

But since DW and I intend to do some extended traveling, I am wondering if we should just sell our home and rent a condo for a couple of years while we do some extended traveling.

This might accomplish two goals:

1. Break apart the stress of sell/buy alignment
2. Reduce the risk of leaving an empty unattended stand alone house for months at a time.

Anyone ever rent for a few years after they downsized? What are the pros and cons of this approach?

Depending on the condition of your local housing market, it may take considerably longer to sell than you expect.

Why not put the house on the market and begin your extended traveling while it sells? You could put your stuff in storage, if you are concerned that it might be stolen. That would be less expensive than a condo. Your realtor can help you arrange someone to check on your home now and then. When you get home, hopefully your house will be sold. At that point, you could rent a corporate apartment (furnished, month-by-month) until you can find and buy your new home. I would expect that this won't take more than a couple of months or so, with the great selection of homes available.

This way you might not need to rent a condo for the whole time.

 

[hankster]

When I FIRE... the first order of business, besides a little traveling, is to get the house ready to sell.


We intend to downsize and simplify.


We know what kind of home we want to buy.

But since DW and I intend to do some extended traveling, I am wondering if we should just sell our home and rent a condo for a couple of years while we do some extended traveling.

This might accomplish two goals:

1. Break apart the stress of sell/buy alignment
2. Reduce the risk of leaving an empty unattended stand alone house for months at a time.

Anyone ever rent for a few years after they downsized? What are the pros and cons of this approach?

We downsized 2 years ago in preparation for retirement. We got a sweet deal with dirt cheap rent in a company owned house near my workplace. Got rid of the 10 acres with house, shop, barn. High maintenance.

Like you, we are travelers. We've been traveling a lot since the house sold and plan to be on the road about 6 months/year after FIRE. We think a condo rental is our best option for the early years of retirement. We would be unlikely to buy a condo. We'd prefer to have a small house when we do finally stop being road warriors

 

[Orchidflower]

We've begun selling off furniture already. Our new house will not have a living room or a dining room, .

Out of curiosity, will you be using a table and chairs to eat on in your great room? What do people do when they have guests over to eat in a great room or don't they do that? I always wondered about that aspect of the great room idea that's in vogue...altho I do love the look, also.

 

[REWahoo]

What do people do when they have guests over to eat in a great room ...

If they are like us, they go out to eat. I think that's how the room got its name...

Me: "James and Judy are coming over. Let's go out to eat."
DW: "Great!"

 

[W2R]

Out of curiosity, will you be using a table and chairs to eat on in your great room? What do people do when they have guests over to eat in a great room or don't they do that? I always wondered about that aspect of the great room idea that's in vogue...altho I do love the look, also.

I have plans to turn my (completely unused) dining room into a home gym. Can't wait! I have laid it out on graph paper, which gives me an idea of how much equipment I can fit in there and how I could arrange it. When we get together with friends or relatives to eat, generally that happens at a restaurant instead of at someone's house.

If they are like us, they go out to eat. I think that's how the room got its name...

Me: "James and Judy are coming over. Let's go out to eat."
DW: "Great!"

Yeah, like he said. I posted before seeing his post.

 

[REWahoo]

I have plans to turn my (completely unused) dining room into a home gym. ..... When we get together with friends or relatives to eat, generally that happens at a restaurant instead of at someone's house.

Sounds like a great room!

 

[W2R]

Sounds like a great room!

It's gonna be fabulous! I already put my old 19" TV in there, and I have picked out the exercycle that I want. There will be room for a treadmill and a home gym in there too, when I get around to thinking about them, and plenty of room for Wii Fit. I'll put mirrors and a white board on the walls, and it already has a high ceiling fan to keep me cool. There is room for F.'s free weights, and he can work out there too if he wants to.

My den is where I LIVE -- guess that could be called my great room, but I call it the den.

 

[Moemg]

Out of curiosity, will you be using a table and chairs to eat on in your great room? What do people do when they have guests over to eat in a great room or don't they do that? I always wondered about that aspect of the great room idea that's in vogue...altho I do love the look, also.

Most newer Florida homes are the great room plan but they still have a dining area . The thing that is good about that is when you have big celebrations such as Christmas or Thanksgiving you can just extend the table into the living area .

 

[Bestwifeever]

Anyone ever rent for a few years after they downsized? What are the pros and cons of this approach?

I have family who did just this. They lived in an apartment for about five years after retiring and selling their house and recently bought a new townhouse.

The cons for the apartment were a few rowdy neighbors (and moving twice as a solution). They also had to get used to unassigned parking places where they rented (Both educational--the townhouse they bought is so well built you wouldn't hear a bomb go off in the unit next to them and it has two assigned spots for them). Another pro for the rental was that the proceeds from the sale of the house generated enough income to pay most of their rent.

I don't think they felt their apartments were as secure as the townhouse turned out to be in terms of lock and leave for travel but family kept an eye on the apartments for them.

 

[Midpack]

Out of curiosity, will you be using a table and chairs to eat on in your great room? What do people do when they have guests over to eat in a great room or don't they do that? I always wondered about that aspect of the great room idea that's in vogue...altho I do love the look, also.

We much prefer the great room concept, we wouldn't consider a home with a formal dining or living room ever again. We'll have a dining area adjoining the kitchen. Right now we have that and a formal dining room, that's what I'm talking about doing without (we used the formal dining room less than once/year for the past 25+ years). And we kinda like to meet friends for dinner at restaurants a lot of the time too.

 

[flyfishnevada]

How about renting your house while you figure out what to do. You probably won't make much, if any, income, but someone else with be paying your mortgage. if it's paid off, you can use the rent they pay your to rent your own smaller place. In this market, lot's of people looking to rent, not as many looking to buy.

 

[Katsmeow]

Chinaco

I love W2R's idea of traveling while your house is on the market. We put our house on the market last April with the thought that it would sell by the fall. After Thanksgiving we took it off the market for the holidays and it is going back on the market in the next week or so.... Point being that it can take longer to sell than expected.

We did consider renting for a few years since we still have 2 teenagers at home but we have pets that making renting impractical. If it wasn't for that I think it is a good option.

Out of curiosity, will you be using a table and chairs to eat on in your great room? What do people do when they have guests over to eat in a great room or don't they do that? I always wondered about that aspect of the great room idea that's in vogue...altho I do love the look, also.

Here are a couple of pictures:

Tilson Homes-Plan Details

This is the plan of the house we are likely building. Scroll down on the left to view the kitchen picture and then the family room picture. However, we plan to make the kitchen slightly larger and put in the large curved bar in the link below. (The house in the below link is way too large but I do like the island/bar).

Tilson Homes-Plan Details

That large curved bar will easily seat 8 people, plus there is a breakfast table that will sit 6. We don't usually have more than 14 people over to eat.

 

[Khan]

I am looking to move to a 1 BR Apt after the cat dies.

 

[Brat]

DH & I downsized last year. The house was on the market about 9 months.

We didn't consider leaving it, but briefly, because it needed to be in show condition. In the course of this process we made a list of things we wanted to shed. We needed to keep furnishings, paintings, decorative items in unused rooms but once we had an offer in hand out came the list, stuff was moved to the garage for sale. We photographed the garage sale setup and advertised the garage sale on Craigslist. Amazingly we had folks calling for earlies and sold maybe 25% before opening.

Basically we reduced our living space by 50% by moving to a co-op. We don't regret it for a moment.

 

[walkinwood]

We are just beginning the process of getting the house on the market. We want to downsize and move to a lower cost, but urban area - probably Denver. We plan to rent for 6 months to a year to make sure we like the place before we buy.

A town home, if we can find one, would be ideal. It would allow us to lock and leave, while not having anyone living below or above us.

 

[chinaco]

Why?

Our home is larger than we want to keep up with and so is the property. As we age we know we do not want to put the effort in to keep it up. (that is what I mean by simplify)

We own it outright and are in good financial shape so the downsize is not because we need to extract value from the home. But the replacement home will probably be less expensive because of less size... but we intend to buy a new or (fairly new) replacement home..

Plus, as Midpack stated.... if the home is larger than one needs, there are ongoing costs for up keep, taxes, etc.

Also, at this stage, our home is not too old so it is still desirable from the curb and inside.

If you mean why sell now... I have a price in mind that I expect to get. We can take our time to get our price! No big hurry. But once I stop working the prep for sale is at the top of my "honey do list".

Our home and the property has some very desirable traits that are less common in our location. I believe if we offer it at a fair price... It could go fairly quickly.

 

[rescueme]

Our home is larger than we want to keep up with and so is the property. As we age we know we do not want to put the effort in to keep it up. (that is what I mean by simplify)

The reason I ask is that in our area (mid-Atlantic) most folks don't necessarily downsize just because they retire.

Sure, there are those that want to move to be closer to family that have moved out of the area (primarily childern/grandkids) or migrate to a warmer climate for the worst months of winter, but the few we know that do this don't downsize. They either have a second home or in most cases just rent a place for a few months during the colder months.

It also seems (again, in our area) that there are a lot more services being offered for those that wish to "age in place" in their own home, including medical, shopping, transport services, etc. I'm aware of that since I see a lot of those things happen during my weekly volunteer "work" with the local Meals-on-Wheels organization. Also, in many homes the folks that wish to stay have made modifications that allow them full use of the home - such as elevators (e.g. stairway), walk in tubs, etc, which it seems that a lot of manufactures are starting to "get on board" with the ever increasing "mature" marketplace.

It might just be more of a common thing for those on this board (including moving to another country, which we would not consider), however from what I see for a lot of older folks (which I see a lot ) it's not common.

Most wish to "age in place" and will get services to allow them to stay in their home, if they desire (as we will)...

 

[Midpack]

If you mean why sell now... I have a price in mind that I expect to get. We can take our time to get our price! No big hurry. But once I stop working the prep for sale is at the top of my "honey do list".

I may be mistaken, but I've always thought this isn't a big factor if you are selling and buying. While the price of your home may be depressed by the recession, the price of the house you'd be buying is presumably depressed also. Just as if you sold at the top of the bubble and bought while still in the bubble, both prices would be inflated. So I've never worry about that aspect, always thought it was somewhat of a benefit, but maybe I'm missing something...

If you're trying to sell at the peak and buy at a low, that's something altogether different (not unlike buying and selling stock). I'd think you'd have to be prepared to wait quite a while, most likely a few years (also like stock).