Last year, Activa was proud to host a fun and informative event about how to rightsize to a condo after living in a larger home! We know it can be intimidating to make this change, so we brought in a series of experts to give our audience some of the tools and know-how to do it.
We’ve recapped each speaker’s presentation so that we can offer these insights to all of our ActivaLearn readers. Keep reading to learn how you can make the transition to a smaller space! First up - financial considerations!
The Dollars & Cents
Candace Loughran, Investment Advisor for HollisWealth, spoke to our audience about the financial questions to ask oneself before making the decision whether or not to rightsize to a condo. Here are her top considerations to make:
Is your wealth in the form of home equity, which needs to be liquidated to provide the necessary cash flow for retirement? What if your house might be worth more in 5 or 10 years? OR what if real estate prices fall in the future?
Nobody can predict the housing market, but homeowners shouldn’t just look at house value – there’s a bigger picture at hand.
Do you have adult children who might need to move home if they don’t get jobs immediately? Or are they looking to purchase their own home but can’t afford a down payment? By liquidating your home, you may be able to help them with a down payment – many parents are giving their children an “advance” on their inheritance for such purposes. You could also consider purchasing a 2-bedroom condo so they have somewhere to sleep between homes.
If you have aging parents, you may be worried about them not being able to live with you in your new condo, but a 2- or 3-bedroom home may be the right option, since condos tend to have more accessible layouts than most homes. Otherwise, you can use the equity from your larger home to help them move to a senior’s community.
Other benefits of a condo lifestyle include not having to rake leaves, or shovel a driveway (many condos also come with underground parking!), and mobility concerns can be mitigated with one-level floorplans in buildings with elevators. The costs of heating a condo also tends to be lower than a large house, and you won’t be living in ‘wasted’ space. Liquidating your larger home to purchase a smaller condo can also free up some cash flow so you can travel and avoid winter altogether!
Overall, your situation is unique – nobody has the exact same considerations that you do! Working with a financial advisor can help you weigh the pros and cons, and consider other factors, like closing costs, capital gains considerations, financing, and more! They’ll help you understand your cash flow, and help you look at the bigger picture to help you plan so your money outlives you. Rightsizing to a condo can be a wonderful experience with a simpler lifestyle, but the best outcomes are often a result of some extra planning!