Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].
Question from Lynda in IL: Hi Brian, I don’t really have a question. I just wanted to share with others the best real estate decision that I’ve made as I enter old age. I’m 71 and my husband was nine years older than me. He passed away five years ago, leaving me with a large four-bedroom, one-den, three-bath, three-car garage home on a large lot in the suburbs. I’m not even sure why we had such a large home since we never had children but that is where I found myself. After being alone for four years, I found myself only living in a few rooms, the master bedroom with a bath, the family room, and the kitchen. I no longer had much in common with the neighbors. At first, I thought the neighborhood had changed because we used to visit with neighbors frequently, but I wasn’t anymore. Then I realized I had changed more than the neighborhood. Over the years, the old friends had sold and moved away. The new neighbors were families with children much the same as it had been 20-years ago. I had become the old lady down the street and didn’t have much in common with any of them. I was becoming lonely and isolated.
That’s when I decided to do something to improve the later years of my life. A year ago, I moved into a 55 and older one-bedroom one-bath condo. I’m much happier here. I’m also much better off financially. I have a lot fewer expenses here – no yard maintenance, lower utilities, almost no repairs, less insurance, etc. After one short year, I still don’t know too many of the people here well, but I have started joining some of the activities and getting to know more people closer to my age. Life has gotten much better than the first several years after my husband passed and I just wanted to share my experience with others.
Answer: Hello Lynda. I’m glad things have worked out so well for you. Since you didn’t ask a particular question, I’m happy to share your story and also share a few tips and insights for baby boomers thinking about downsizing. One place to start is by thinking about how technology has made downsizing easier and more convenient. For instance, in the age of Uber, Lyft, and other car services, aging drivers have less need to own a car. If you don’t own a car, you don’t need a garage. Those who like to read also no longer need a den with books shelves filled with printed books because today every book is available in the cloud and is read from a Kindle or notepad. Community-based living means having a clubhouse with all the amenities available for entertaining. The overall result is less need for a large home.
Finding the perfect time to downsize isn’t simple. If you’ve recently retired, your new lifestyle takes time for adjustment. Fortunately, you now have time to make these adjustments exactly the way you want to.
However, prioritizing how you will spend your time (leisure, grandkids, travel, etc.) is an important part of deciding to downsize. Importantly, downsizing is a real estate transaction. Making the best real estate decision can include getting into the market at the right time. This includes considering the strength of the market and interest rates. Today could be a good time to get into the market. The market appears to be plateauing near the highs. Home values are still increasing in value but at a slower pace. Very importantly, interest rates have come off historic lows but remain reasonable for the time being. No one knows what the market will be in several months or years, but the exceptionally high rate of appreciation is probably gone, at least for a while. It still looks like a good market for people wanting to sell one home to buy another. For people who are downsizing, this is an opportunity to come away from the transaction with a significant amount of cash in your pocket (depending on your circumstances). But for baby boomers, your downsizing decision must support your lifestyle goals…
You have many options when it comes to downsizing… some you might not have considered. It could be a smaller one-level home, or a 55 and older planned community. Tiny houses are a relatively new option that is possibly preferable to apartment living. Your retirement home doesn’t even have to have a foundation. It could be a houseboat or an RV.
The first consideration is your lifestyle goals…
Leisure lifestyle. There are many senior living communities emphasizing tons of leisure activities. Shared amenities can include tennis courts, walking trails, a golf course, swimming pool, lake access, clubhouse (with scheduled activities), fitness center, and much more. Full-size homes designed with seniors in mind often include a sunroom, chef’s kitchen, RV parking, each bedroom with a separate bath (great for guests), and much more.
Grandchildren. Frequently visiting with grandchildren keeps you active while also staying young at heart. In the right home, you can play games with grandchildren and bring them into your kitchen to teach them family recipes. Something to think about is how a new home will affect your kids and grandkids. Do you want room for everyone to visit, it’s a lot of work? You may want a place with a playground. Almost every senior community welcome grandchildren to visit although you’ll want to understand any rules before committing.
Travel. Getting out on the road poses its own set of decisions. It could mean a need for RV parking at your home base, or it could be making your home-sweet-home near the airport. Another consideration might be that your home is rental-friendly to earn you some extra money while you’re on the road.
What’s important to you should be your top concern when choosing where to live.
Downsizing can be a big chore after a lifetime of accumulating memorabilia and artifacts. Fortunately, in retirement, you have the time to do this methodically over several weeks or months. Begin by separating out the easier to part with items. You probably already have a list in your head of items in the garage and kitchen that you’re willing to let go of. You likely also have at least a partial list of items you want your children, grandchildren, and others to have. These are good lists to start pulling things together.
Move on to rooms with less emotional attachment and rooms that you won’t have in your new home. Most people aren’t too emotionally attached to the laundry room, and you’ll have to do without a 4th or 3rd bedroom and basement. A good rule of thumb is only separating things into “keep” or “let go” piles. A “maybe” pile will drag out the process by making you think it through more than once. The exception for having a third pile would be a pile of what you will sell or donate.
Take the time to give each item a moment of your attention. You’ll quickly find you develop a logic for making the decision. Go through each room one at a time. You may find you have a different decision process for each room. You’ll also avoid regrets by giving everything at least a moment of thought.
Items that are easier to get rid of include duplicates and things you haven’t used in a few years or rarely use. That oversized roasting pan that you only use at Christmas might go to a grandchild who can bring it over once a year.
People have collections they find difficult to let go of. Photo albums can be digitized. You can select a few favorite Hummel figurines to keep and sell the rest for a nice roll of dollars. Family members might be interested in at least part of your collection or maybe you can divide it among several relatives.
Be sure your family knows that a big part of your downsizing means letting go of your treasures. Ask them to tell you what they want. Giving away some difficult to part with treasures can still bring you happiness. Giving your son the grandfather clock means you can see him enjoy it now and you can still enjoy it when you visit. You may also learn you have things you didn’t think anyone would want but your granddaughter actually does want your old sewing basket. Pick a weekend to invite the family over for a day to show them what you are letting go of and tell a few stories behind your fondest possessions.
One reason to start downsizing early is to give yourself time to reminisce. There’s a reason you’ve saved this stuff all these years, even if you haven’t looked at it for a long time. Now you have the time and reason to enjoy it again.
There are many retirement options and tips out there. Please comment with your thoughts.
Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].