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You often hear about homebuying as a way of expanding: getting more space, building more wealth, or putting down deeper roots. But for some people, buying a house is about the opposite — downsizing.
There are many reasons to move into a smaller house. It’s a common decision in retirement, for example, when older homeowners want a place with less maintenance or just don’t have the mobility to live in a large, multi-story property anymore. It also might be necessary for budgetary reasons if you find yourself operating on less income and in need of a lower monthly mortgage payment. If you’re considering downsizing your home soon, here’s how to go about it.
In this article:
How to downsize your house
Downsizing your house requires more than just finding a new place and moving in. Because you’re going from a larger home to a smaller one, you’ll also need to work in a few other steps. Keep reading for a step-by-step guide to the downsizing process.
1. Know why you’re downsizing
As we mentioned, downsizing is common for retirees, but those aren’t the only consumers who choose to downsize their properties.
Here are a few other grounds for moving into a smaller home:
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Financial reasons: You might need to save money or free up monthly cash flow.
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Less upkeep: If you’re tired of taking care of a big house or just want a lower-maintenance property, you might think about downsizing.
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Divorce: As you and your former spouse start new lives separately, you might opt to sell your joint home and buy or rent smaller spaces with the proceeds.
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An empty nest: If all of you're kids have moved out and you're an empty nester, you might prefer a smaller place.
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Location change: If you’re moving to a new city where home prices are higher than you’re used to, you may be forced to downsize to afford a house in the area.
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Mobility issues: If you’re aging and can no longer manage stairs, a smaller, one-story property may be a better option.
Understanding why you want to downsize can help guide you through the rest of the process. For example, if you’re looking for a lower-upkeep home, it might inform what type of property you shop for (perhaps a condo over a detached single-family home).
Learn more: How to handle your mortgage when getting a divorce
2. Create a budget
Before you can start searching for a new home, you’ll need to put together a detailed budget. What are you looking for in terms of a monthly payment? How much can you spend on utilities, taxes, insurance, and other expenses?
Most financial experts recommend spending no more than 28% of your gross (pre-tax) monthly income on your mortgage and 36% of your income on total debts each month. So if you make $5,000 per month, you should be aiming for a monthly housing budget of about $1,400 (28% of 5,000).
The “28” of the 28/36 rule includes your mortgage principal, interest, property taxes, homeowners insurance, and any other expenses that make up your monthly payment. However, it does not include things like utilities and moving costs. Make sure to factor in these other costs when building your budget for moving into a smaller place.
3. Find a property
Next, you need to find the right type of home to move into. Depending on your goals, you might have many options. Here are just a few considerations for your new home:
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Detached, single-family home: This might be a good option if you want privacy or a yard for kids, grandkids, or pets.
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Townhome: This is like a smaller version of a single-family home, and a townhouse typically costs less than a full single-family home. However, you may have neighbors with attached walls, and townhomes tend to have at least two stories. They’re probably not the best fit for older homeowners who want to age in place and avoid using the stairs
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Condo: This could be the right choice if you’re looking for something low-maintenance but still want to own your own place. In condos, the community association takes care of many maintenance tasks, such as landscaping, with the exception of those in your actual unit. They also come with certain community amenities, like pools or fitness centers.
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Tiny home: Maybe you’re really wanting a smaller space — like, only a few hundred square feet. Tiny houses can be great for environmental reasons and affordability.
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Apartment: Renting an apartment might be a good fit if you want even more help with maintenance from a landlord, or you don’t plan to stay put for long.
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Retirement or assisted living community: This might be a good fit if you’re a senior looking to be around others your age or just want extra help getting around.
If you need help deciding what’s best for your budget, talk to a real estate agent in your area. They can help you determine the best option in your local housing market.
4. Measure and plan
Once you find a place, you’ll need to take stock of just how much real estate you have to work with. How big is each room, and what are the dimensions? Your real estate agent may be able to provide you with a detailed layout that offers this info, or you might need to go in and measure the square footage yourself.
Either way, this will help you determine which furniture you have space for, what you will need to leave behind, and what you may need to replace with smaller, more compact options.
5. Downsize your belongings
When you know the dimensions you’re working with, you can start prepping for your move. To start, you’ll need to declutter. You can sell or donate any furniture or large items you won’t have room for, and then move on to smaller items, such as clothing, home decor, and kitchenware. Consider donating or selling anything you rarely (or never) use anymore, or items that are duplicates.
Good options for donating or selling items include:
If you can’t offload all of your items, you may need to look into a self-storage unit. These can keep your things safe and secure until you need them.
6. Make the move
After you’ve closed on your home or secured your rental, it’s time to make the move. With fewer belongings, you may opt to do this yourself, enlist the help of friends and family, or rent a small truck to move to your new place.
If you choose to use a moving service, be sure to shop around for a moving company and time your move wisely. Moving services tend to be cheaper on a weekday, in the middle of the month, and in the wintertime.
Downsizing your home FAQs
What are the benefits of downsizing your home?
There are multiple benefits to downsizing your home. A smaller, more affordable house can save you money on monthly payments. It can also reduce the labor and cash spent on home maintenance, repairs, and upkeep, and make it easier for you to move around your property (especially as you get older).
How do I start downsizing my home?
First, determine your goal for downsizing and put together a budget for your move. Then, find a property, take measurements, and start downsizing your furniture and other belongings.
At what age should you downsize your house?
This depends on your finances and goals, but many people consider downsizing once their children have permanently left the house or they have entered retirement.
Is there a downside to downsizing?
Downsizing typically means less storage space, which can lead to more clutter if you’re not careful. With your limited real estate, you might also not have room for guests or hobbies.
Laura Grace Tarpley edited this article.
