When is the Best Time to Upgrade and Downgrade your Home

Are you thinking of making your home a comfier place to live in or perhaps update it? Or are you thinking of selling your home and the agent says it's time to upgrade? Maybe you’re ready to downgrade since you’re retiring after all these years.

Whatever the reason is – downgrading or upgrading – it’s OK, but there are some things to consider before doing either.

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1. Lots of space and extra rooms

Are you finding your current home has too many rooms; ones you haven't used for ages? Are your kid's old rooms filled up with holiday decorations? Never used? If so, you’re likely to have too much space in your current house. If you’re an empty nester, it’s time to downgrade to a smaller house as it will be easier to manage.

2. More Family, More Space

On the flip side, if you’re adding more kids to your brood, you’ll need to upgrade your home. Besides needing additional space, you might want to find an area with better schools, more greenery, parks, a downtown area, etc. If you don’t have kids or aren’t expanding your family, still buying a home in a great school district is a good reason to move to a new area since it will add value the next time you sell.

 3. Change in Status

If you’ve changed your relationship status recently you might want to think about either an upgrade or a downgrade. Maybe the current house brings back too many memories of a previous relationship? Are you getting married or living with a special someone and need new digs? It may be the right time to sell and find your new dream house.

  4. City Life Beckons

Perhaps where you’re living now has changed and it’s no longer the place you want to remain. Selling it and moving to a larger city where there’s hustle and bustle may be where you prefer now.

   5. Costly Repairs

5. Costly Repairs

It can be hard to continue to make repairs on an older home and especially if you’re living in an expensive city. It could be the right time to consider relocating to a new, smaller home. Why would you want to continue spending money on tons of expensive repairs if you know that money will be wasted?

   6. Job Changes

6. Job Changes

Are you someone who is in a transferable job and just got the word you need to move? Suppose you got a position in Arizona, but your family needs to stay in Colorado. Perhaps after your retirement or joining a new job, you consider moving from the new house in Colorado. You might be ready to sell it and go back to your old house and live with your family.

   7. Tight Financial Situation

Maybe things aren't financially great right now, and you’ve got debt, and it’s getting harder to make the monthly mortgage payments. If you sell your home and downgrade you could get rid of this problem. Downgrading from an expensive area to one that’s more affordable could help relieve your stress and offer you financial peace of mind.

   8. Bad Neighbours

If you’ve got the neighbors from hell it may very well be time to put a for sale sign up. There’s a possibility that you’ve been trapped in the wrong neighborhood for too long and need to get a handle on your life moving forward. Sell it and move to more peaceful surroundings and enjoy life again whether you upgrade or downgrade to a new home.

   9. Housing Expenses Too High

When it comes down to how much of your monthly budget should be spent on housing expenses, 30% is what the experts suggest. The U.S. government has been using 30% as the standard for housing affordability since the United States National Housing Act of 1937. Since then, any household paying above 30% of their income on housing is considered financially burdened.

Sure, while you’re still gainfully employed, your housing costs may fit your budget. But once you’re going to retire you can expect as a retiree you’ll be in the burdened bracket. Yep, housing cost burdens increase with age as expenses continue to rise and income is reduced in retirement. Be sure you head to an area and a home you can afford and consider downgrading.

A Merrill Lynch survey revealed 64% of downsizing retirees are making the transition to a smaller home to cut down on their housing expenses, so you’re not alone. And, if you downsize chances are likely you will save you money in the long term but be prepared for some upfront expenses that come with moving.

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  10. Less Expense

Living in a smaller home can surely cut the mortgage payment, and cost of utilities, property taxes, and maintenance. Some updates to downsize include lower physical burdens around the house – meaningless inside and outside physical work. Also, when you go smaller you can get rid of clutter and things that you haven’t used in years. Experts suggest if out haven’t used or worn it in six months, get rid of it, donate it or trash it.

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   11. Outgrown the Neighborhood

If you moved into the current neighborhood when you were younger and raised a family, now years later, it’s no longer a fit. Maybe there’re too many kids, and you want quiet, solitude, and peace.

Also, maybe those original folks you made friends with have either left or passed away.

This can be depressing and cause you to be unhappy in the home. It could be time to downgrade and move into the age-appropriate community and one where you may be more comfortable.

  12. HOA or Home Owners Association

Downgrading to a smaller home in a retirement community means living among your peers — if it has a healthy, active homeowners association. Many adult communities also have amenities including tennis courts, classes, theater arts, art, and craft, woodworking shops, cards, and board games that a homeowners' association pays the fees. However, moving into a community that charges HOA fees mean adding to your monthly housing expenses above and beyond any mortgage payment, home insurance, utilities, and property taxes that you’re already paying. So be prepared but it will most likely be cheaper than what you were paying on a monthly house mortgage.

Choose Wisely

Opting to downgrade or upgrade takes some thought but if you choose wisely your move into a less expensive home has the potential to save you money while moving into a larger upgraded home offers its own set of benefits.

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