Thursday, September 11, 2014

Downsizing and the Empty-Nest

After your children have moved out, either to start their adult lives or to attend college, your once-busy-and-full home can seem strangely quiet and empty. Many older adults who find themselves in this situation decide to downsize and move into a smaller Ottawa home. Downsizing can be financially beneficial, but it can also be a long and involved process if you aren't careful.

The Two Sides of Downsizing
Downsizing involves selling your current Ottawa home and purchasing (or renting) a new and smaller one. If you plan it correctly, you can save a considerable amount of money when you sell your Ottawa home and purchase a new one. But, keep in mind that home prices have risen since you first purchased decades ago. You might be surprised at the asking price for even a small home in your area.

You might have some emotional attachments to your current home that might get in the way of you effectively selling it. Typically, there's the urge to price your home high, since the home has so many memories for you. But, remember that your emotions are not the same as the emotions of the buyer.  So, you need an objective person to help you sort out these emotion-laden thought and ideas.  This is where a real estate agent can help you determine the price for your home based on a comparative study of the prices of similar homes in your area.

Weigh the cost of purchasing a new home carefully. Depending on how old you are and your financial goals, you might want to purchase your empty-nest home outright, instead of getting another mortgage. Paying cash for your new home means you may actually pay less in the long run as well as you will incur no interest charges. Obtaining a mortgage can also be financially beneficial if you utilize this money to buy other investment properties or other holdings.
Another way to downsize and save money is to move in with your grown children.

Making Room
When you move to a smaller Ottawa home, you can't take all the possessions in your current space with you. Although this fact is undeniably true and a physical reality, some downsizers are depressed by this fact.  Others, however, are elated.  Regardless, downsizing means trimming the items you own, not just reducing the size of your house. Your children can help you purge items from your current home. 

To encourage them to clear out their childhood bedrooms, hold a family clean out day. Each grown child can focus on cleaning out his or her old room, deciding what to do with their old belongings themselves. If your kids aren't interested in cleaning out their stuff themselves, you can take it upon yourself to discard it or to donate useful items to any of a number of worthwhile local charities.  Some may actually give you a tax deductible receipt for these donations.
Some of your possessions may in fact be of interest to a museum or library and again a tax deduction receipt may be obtainable for those donations.

Deciding what to do with the rest of your possessions can be difficult. To make the process easier, you might want to start with the bigger pieces. For example, if your new home doesn't have a separate, formal dining room, you can probably safely donate your old dining set. If the new home only has a small living room, you can easily decide to donate your large sectional.

Things can become more complicated as the items become smaller. You might have a accumulated a large collection of knickknacks over the years. The best way to sort through these items is to do it quickly. Only handle an item one time before making a decision about it. If you keep returning to an item because you aren't sure if you want to keep it, it will take you a long time to purge your home.
Other means of purging yourself of your extraneous possessions is to hold a garage sale or a neighbourhood give-away day, or to advertise your items in a local newspaper or on Kijjiji (or another on-line site) or you can hire the services of an antique dealer or an estate auctioneer. Finally, some items may be usable by a local church charity or by building material re-cyclers or an organization such as Habitats for Humanity.

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