The American dream of owning a large mansion with a supersized garden has disappeared. However, the dream of being a homeowner remains strongly. Most American families have admitted that if they were to move, they would downsize their homes.
While seniors are more likely to want to live in a smaller home than Millennials, young adults are not looking forward to purchasing big properties. In fact, many have embraced the tiny house concept. And some have even chosen to build it themselves, at a low cost and in a sustainable manner.
Ultimately, the Beverly Hills mansions don’t impress as much as they used to. TV programs such as “Tiny House Hunters” have helped to increase the popularity of small properties by pairing people with homes of around 600 square feet.
Additionally, as people are getting less home for their money, the decision to look for more affordable options, even if smaller, is a natural consequence of the housing market crisis. However, despite the obvious difference in value, is it fair to depict the process of downsizing as a wealth improvement process? Can you become wealthier if you downsize? It’s what we’re going to look at today!
Can Your Really Get Wealthier If You Downsize?
Sell your home at the best price
It doesn’t matter how affordable a small house might seem. They don’t come for free. Consequently, if you are looking for the best strategy to downsize your home, you’ll need to consider first all the expenses related to selling your current property. These can be anything from the cost of a real estate attorney to the cost of essential home improvements.
Finding the right real estate agent that can work with you on a level that can make sure you are getting the best deal for your current property is common sense, but not always a given. There are agents like Portland real estate that can help you to find an ideal property but also have a good working relationship that can be hard to come by. Some agents feel they need to make a proper profit, but this is why you need to find someone who comes recommended but is also happy to work hard to ensure you get, financially speaking, what you deserve to make a decent profit.
Indeed, when it comes to selling to make a profit, you need to consider the addition of features that will attract buyers and encourage them to add a few zeroes onto their offers. The addition of laminate flooring is not the kind of home improvement projects that will break the bank. But the clean and smooth finish can convince your potential buyers otherwise. Indeed, laminate flooring always looks more expensive than it is!
Similarly, the addition of extra storage areas, such as under the stairs or in a furbished utility room, can transform your charming home for sale into a practical family home. And it can increase its value.
How small is a tiny house?
The first thing you need to understand if you want to downsize is that tiny homes might be cheaper to run, but they are also smaller. As everyone defines efficient living as the way to make do in a small space, it’s easy to understand why there are so many different sizes of tiny homes.
In fact, while there are plenty of small houses of under 100 square feet, how small your home needs to become depends only on your needs. Ultimately, most tiny homes range anywhere from under 100 square feet to 1,500 square feet, so there’s no need to live in a closet to call it a proper downsize!
Nevertheless, as your property is smaller than average and smaller than you used to, it’s likely that you won’t be able to bring all your belongings with you. You need to make a list of the items you want and need to keep – which ranks from items that have a sentimental value to multifunctional ones.
More importantly, you need to get rid of a lot of things that you may not use every day but that you’ve grown used to seeing in your home. Old clothes that don’t fit anymore or that you don’t wear have to go, books you haven’t read, excessive cosmetics and toiletries products, furniture that won’t fit in the new home, etc.
The actual calculations on your savings
The real question, of course, is a financial one. If maintaining a small home is just as expensive or more than living in big properties, there is no need to downsize. However, you’re in luck; you can make significant savings when you choose the small side of life.
Ultimately, just by living in a home 25% smaller than your current one, you could save a lot of money on your mortgage repayment and property taxes. Now, imagine how much you’d save by downsizing by 30% or even 40%!
Utility costs will be the most significant savings, as a small house will need less heating and light. If you downsize from an average family home by 25%, you can expect to save up to $75 per month on gas and electricity, which makes $900 at the end of the year.
Can I make money through decluttering?
When you go through the process of decluttering your home to move into a smaller space, you will most likely find yourself with a lot of items that are still in good condition but that you can’t take with you. You can increase your savings by turning your clutter into cash, through online selling platforms such as eBay or Craigslist. When selling online, however, you need to make sure that you can take good pictures of the articles.
First of all, clean your items. You won’t sell at the best price if the item is dirty and dusty. Get the lighting right to highlight all the features. And finally, use a solid background. Nobody wants to see your living room or your dog in the background.
Save on health costs too
Last, but not least, tiny homes have a positive impact on your health. Indeed, people who live in a small and minimalist environment have shown to be happier and more relaxed. As the house is less cluttered, the mind stays clear and happy. Additionally, small houses tend to come with fewer worries: They are cheaper to run, which means that families can more easily afford essential repairs and maintenance work. And finally, something that every mom will be glad about, a tiny house doesn’t take long to clean. In fact, in a few minutes, you can get a spotless place!
The bottom line is that downsizing can indeed make you richer. On the one hand, you’ll be able to save on house-related expenses, from purchase to energy costs. But you’ll also be able to repurpose the key features of your tiny home to enrich your lifestyle – both financially by selling the belongings you can’t take with you, and mentally by enjoying a clean and tidy space.
You can read about the tiny house I used to live in and watch a short video tour here.