A friend of mine is currently in the midst of selling her long-time family home and moving. Yet while I believe she “gets” the many benefits of rightsizing, I can tell after talking with her that several issues keep popping up that make her hesitant. That’s completely normal, because in many ways, rightsizing is contrary to what most of us have been taught. The good news is that once you know what to keep in mind, rightsizing not only becomes the easiest choice, it is also the one that leads to the greatest benefits.
What do we need to remember when it’s time to make a move?
1) Don’t rush to buy a home. This is particularly difficult if you’ve owned a home for as long as you can remember. It feels strange to rent because so many of us have identified and felt proud of ourselves as homeowners for so many years. However, the less a person has moved in the past, the more likely it he or she will stay in their next home for many years, and maybe the rest of his or her life. That’s why it is so important to take things slowly.
It is also likely that if you are selling a home and have a deadline to move it will seem very practical to only move one time—rather than live somewhere temporarily and then move again. Unfortunately, what usually happens is that you rush and then end up settling on a new home just so you don’t have to move again. If you remember that the next home you buy might be your forever home, it makes sense to proceed as carefully as possible.
Besides, as a person who has moved over 16 times during my marriage, has owned dozens of properties, and who has been a real estate broker for over 30 years, I can assure you that taking things slowly is likely one of the best things you can do. A big reality is that the home of your dreams might not even be on the market today, but if you wait several months it could be right around the corner.
So what can you do? One choice is to spend a great deal of time looking before you ever put your home on the market to sell. Another option is to rent for a while. Temporary housing is also available that comes furnished allowing you to put most of your possessions in storage. The last time Thom and I moved, we sold most of our furniture, put the rest in storage, and then stayed in a friend’s vacant second home for eight months while we shopped. Eventually, we found the right and perfect home and still live here five years later.
2) Weigh the benefits of renting vs. buying. Most of us in the baby boomer age category were raised believing that owning a home was equivalent to the American Dream. But what we may not have considered is that oftentimes the care, maintenance and unexpected costs of a home can make it more like the American Nightmare for some. The cost of ownership is easily about 25% higher, or more, than what most of us calculate. Renting can be the right choice if you aren’t 100% sure of the home (or the location), if you can rent for less than you can own, or if your future is fuzzy and you don’t know where it will lead.
3) Avoid buying a home as an investment. The best-selling book The Millionaire Next Door, clearly explains that a home with a mortgage is a long-term liability. It costs you to live there. On the other hand, an investment generates income. And although some people have made money in the past on a home they bought many years ago, a larger portion of the population lost money and even lost their homes when the economy tanked.
Besides, anyone who traditionally lives in a home for a long, long time should never consider what the home will be worth in the future. If this is your forever home, does it really matter what it’s worth? Instead, focus on what it costs to live there and the benefits it provides.
4) Don’t buy a home or anything you can’t easily afford. One of the greatest benefits of rightsizing is making the conscious choice to buy only what you can easily afford—especially a home. In fact, when Thom and I decided to go debt-free it was the best thing we did for our lifestyle. Even though we could have gotten another loan on a bigger house, we chose to compromise on a more compact dwelling in a neighborhood that fit our budget. In the end, we were able to obtain all the qualities in a home we desired making it the right and perfect place for us. Better to have freedom and peace of mind rather than extra square footage. We have not regretted our decision for a second in the last five years.
5) Don’t buy a home to store your “stuff.” One of the most common dilemmas I hear from people wanting to rightsize is that they don’t know what to do with all their “stuff.” Unfortunately, some buy a bigger house just because they can’t let go of everything they’ve collected in life. I strongly recommend that you decide whether your future and your happiness require that stuff—and then act accordingly. But please, please don’t buy a home just so you don’t have to face what letting go of it really means.
6) Don’t buy a house for your grandchildren. This is another pitfall I’ve seen grandparents fall into here in La Quinta, CA where I live. Because it is a desert community and swimming is popular, I know several grandparents who admitted they bought a bigger house with a swimming pool to entice the kids and grandkids to visit. Of course when family members do visit, they love the house and grandma and grandpa are happy. Sadly, those visits seldom meet expectations. Clearly that’s an expensive gamble just for infrequent possibilities. Instead, why not just rent a vacation home with a pool, if or when you can actually get a date with your family, and save yourself a tremendous expense?
7) Don’t buy where you’ve always lived just because you’re afraid to try somewhere new. I get it. Some people are worried that if they move away from their family or existing friends they will be lonely. However, if your heart has always craved living somewhere different like near a beach, mountain, desert, city, country, or anything else different, what better time to try? Why not just rent for a while? Try different places. And don’t think you have to move to another country either. By doing some research, you just might find a place that is far less expensive to live but offers you dozens of benefits you can’t get where you are. And yes, your family/friends will visit you there too. Then again, you might be so busy and having so much fun you won’t have that much time to miss them.
Bonus Tip: Stop caring what other people think of the home you decide to choose. If the new property meets your needs on as many levels as possible, then you’ve rightsized your home and that is what really matters. After all, isn’t your happiness and peace of mind more important than those who would judge you based on the price, size, location, or amenities of your home?
Remember, rightsizing is never about sacrificing. It is always about finding a place to live where you can be free to experience the life you’ve always wanted to live. Sure it takes some conscious deliberation and honest self-discovery, but the benefits will be more than you can imagine. By avoiding these pitfalls, the SMART choice is always to rightsize.