Downsizing occurs for a variety of reasons, from empty nesters finding they simply don’t need that much room anymore to families sacrificing some space at home in return for a better location, smaller bills, and less time spent during home chores. Regardless of the reasons they might decide to downsize, most Americans stand to gain a neat sum of money out of it.
Recently, StorageCafe, a nationwide self-storage portal, looked into the potential downsizing savings Americans could get when swapping a 4-bedroom home for a 2-bedroom one. The research accounted not only for the price difference between the two types of homes but also for property tax savings over a 10-year period and the selling and buying closing costs for both houses. It concluded that, nationwide, homeowners can save an average of around $196K by downsizing. However, when looking at individual metro areas, the potential savings from downsizing can be much heftier.
San Jose, CA, takes the top spot for downsizing savings
With its red-hot real estate market, it’s no wonder California can bring in some very nice savings for homeowners who decide to downsize. San Jose, California, is the country’s most profitable metro area in terms of downsizing – moving to a 2-bedroom home from a 4-bedroom one within the metro area can result in over $777K in savings. Of course, that generally means having less storage space at home to work with. Fortunately, the local self storage market can help with that – rent on a 10’x10’ self storage unit in San Jose, CA, hovers around $177 per month. Such a unit, which is about as big as half a standard garage, can hold plenty of belongings, including extra furniture and appliances, clothing, tools and sports equipment.
The second spot for downsizing savings is also in California – moving to a 2-bedroom home from a 4-bedroom one within the San Francisco metro area could potentially help homeowners pocket an impressive $563K. Urban Honolulu, Hawaii, ranks third, with potential savings of around $519K for local homeowners who decide they can manage with a smaller home. Moving on to the East Coast, Bridgeport, Connecticut, lands on the fourth spot nationally, with savings of almost $463K when swapping a 4-bedroom home for a 2-bedroom one. Yet another Californian metro, San Diego, rounds out the top five of the most profitable metro areas for downsizing, with potential savings of $340K for homeowners trading their large home for a smaller one.
How to make downsizing less stressful for you
Now you have seen the potential financial gains from downsizing, you might be considering doing the same yourself – but only, of course, if moving to a smaller house is a feasible option for you and your family. However, downsizing is not an easy feat: not only would you be moving and probably managing some home renovation projects at your new house, but you would also have to sort through all of your possessions and give up on a good portion of them. Here are some tips on how to make downsizing easier for you:
- Downsize big items first, such as furniture and appliances, as they might not fit properly in a smaller home. Use tape on the floor of the new home to visualize whether your existing furniture and appliances are suitable for the new place. Don’t forget to measure the door frames to ensure that you can, indeed, get the furniture and appliances into your new rooms. Keep only those items that can be comfortably used in a smaller home and sell or donate the rest.
- Start downsizing from the outside in – your garage, attic and basement probably have plenty of items you haven’t used in years, and now is the right time to dispose of all of that.
- Keep only one of each item: one vacuum cleaner, one stand mixer, one power drill, and so on. Many families end up owning more than one of the same type of appliance or tool, but this doesn’t work well with limited storage space. Pick the ones you prefer and sell, recycle or donate the duplicates.
- Photos, postcards, old magazines or even pieces of clothing — many such things have sentimental value and it’s difficult to let them go. One way to solve the problem is to digitize everything, by scanning and taking photos. You could also create a scrapbook of your most important memorabilia, or frame and display things like special T-shirts, kids’ artwork, and so on.
- Consider alternative storage options, such as self-storage. If the new home has very little storage space, certain belongings that you don’t use every day, such as holiday decorations, out-of-season clothing, various tools, camping equipment, and so on, can be kept in a self-storage unit located close to where you live.
- Stop saving stuff for future use. Those expensive sheets you bought a while ago that are still in your closet, or the fancy tableware you are keeping for a special occasion – maybe you should go just ahead and use your nice stuff! “Saving it” doesn’t help anyone, and only creates storage issues.
- Do you have things you want to pass on to your children, grandchildren or other family members, or to your friends? Downsizing is a good moment to do just that – they will certainly appreciate it, and you’ll have less stuff to move to your new home.
Downsizing involves a bit of work, but it can be beneficial for some families – including financially. If you decide to take this step, hopefully, our tips will make the entire process easier for you.