How to downsize without tears
With their children grown and leaving for university, jobs abroad or homes of their own, an increasing number of people in their 50s and 60s are downsizing from big family homes to smaller, lower maintenance properties in security complexes - but the process is often painful
"Even owners who have been planning their move for years can find it extremely difficult to start packing when the time finally arrives to do so, and usually that's not because they are scared of getting older, but because family homes are associated with so many memories and emotions," says Rudi Botha, CEO of BetterBond*, SA's biggest bond originator.
"In addition, even when empty-nesters can see the financial advantages of downsizing, they often worry that it will also entail a drastic change in lifestyle. And then of course there is the hard work of the move itself, especially when it means having to sort through 20 or 30 years' worth of possessions to decide what to pack and take and what to sell, give away or discard."
"However, we meet clients who are doing this every day, and have learned that there are quite a number of positive aspects to focus on that can make the change much easier and the move something to actually look forward to."
The first of these, he says, is the relief from the high costs of maintaining a large property and keeping it in good condition. There is also less risk of having to replace or repair expensive components such as the roof, wiring or plumbing. "It's important to remember that your home isn't getting any younger either, and that a property that gets run down because you no longer have the energy, agility or inclination to keep up maintenance will be harder to sell if you delay your move."
Secondly, a smaller, more modern home can actually mean a better lifestyle, because it frees up time as well as money for other endeavours, such as hobbies, travel and study - or for some of those luxury features you've been promising yourself for years. You'll also have the opportunity to choose a home with greater security if you wish, or maybe one that doesn't have stairs and will be easier to get around as you get older.
Botha also notes that they younger you are when you make the move, the easier the transition is likely to be. "There is much less chance that you will have to make a forced sale due to changed circumstances such as ill health, and a much greater chance that you will make new friends and develop new interests in your new location.
"In addition, if you plan ahead and control the timing of the sale, you should be able, with the help of a knowledgeable local estate agent, to make your move when the market is in your favour. This may mean you pay more for your new home then than you would in a softer market, but if you're selling a more expensive property in the same market, you should come out well-ahead financially.
"And then of course if you apply for your new home loan through BetterBond, we will ensure that you get the very best interest rate available, which will make your move even more financially advantageous.
"At the moment, we are finding that the average variation between the best and worst rate offered on an application is 0,5%, which could translate into very significant savings for the borrower, at no cost for our service. On a loan of R1,5m, for example, the potential savings amount to more than R120 000 worth of interest over the 20-year lifetime of the loan, plus some R6000 a year off the home loan instalments."
*BetterBond is SA's biggest bond originator, accounting for 25% of all new mortgage bonds registered in the Deeds Office annually. Its statistics are thus a reliable indicator of the state of the residential real estate market.