4 Questions to Ask Before Downsizing to a Condo
Posted by Steve Harmer on Thursday, September 29th, 2016 at 4:56pm.
Downsizing to a condo in Kamloops
There’s a big trend in real estate right now, and it will continue for the foreseeable future. This trend is for empty-nesters and baby-boomers to sell the large home with the goal of downsizing to a condo. Many owners are finding themselves in 3, 4 and more bedroom homes, the kids have moved out, and they no longer have the desire to maintain a large home where they are only using a small part of.
But condo living can be a major lifestyle change, both an extremely positive change for most but can also be a huge disappointment for some. Before taking the decision on downsizing to a condo, you owe it to yourself to answer these 4 questions to see if condo living makes sense for you.
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Often people are enjoying retirement (or planning for it soon), have an active lifestyle and taking advantage of all that it has to offer, including more time for children and grandchildren, golf or other sports and hobbies, winters in warmer climates, vacation properties and travel to fantastic locations.
What they all have in common is that they really know they don’t require such a large home with all the maintenance and costs involved to keep it. They have questions and are thinking about downsizing to a condo or smaller property with more amenities, fewer maintenance issues and a more freedom to enjoy their retirement instead of spending that time taking care of a large home. But the decision to downsize is not an easy one. Many of my clients have discussed it but have not come to a decision.
Ask Yourself These 4 Questions Before Downsizing to a Condo
1. Do you really need all the space you have now?
For most of my clients the answer is no. Many I meet have 2-3 bedrooms empty or set up with beds for visitors but are not being used at all. Some of the rooms have not been used in many years. Many find the time and effort needed to maintain their home and yard to be a burden and no longer a priority for them as they enter retirement. The attractiveness of downsizing to a condo is that it offers them the freedom to do the things they always wanted to but could not with so many job, family and house maintenance responsibilities.
For others who with a large group of family and friends who visit often, the thought of downsizing to a condo is not the most enticing for them. Another complaint that many new downsizers mention is the lack of storage space in even larger condos. Coming from a home (with a potential basement and garage used as storage) trying to fit all your precious belongings into a 4 x 6 locker is not what they were ready for.
Also clients who enjoy hobbies like painting or have home studios for music have storage requirements that cannot reasonably be accommodated in most condo lockers or smaller condo bedrooms.
Ask yourself if getting rid of a lot of belongings and not being able to bring all your keepsakes is something you can handle. Or is no longer having to cut your lawn or get the snow removed or have maintenance done on every aspect of your property more attractive. In my experience the downsizers who are eager to make a new start and set up their condo as a new space with more minimal or modern furniture and decor that suits the space and a new lifestyle often end up happier after downsizing to a condo than those who try to squeeze all their belongings and oversized dated furniture from a big home into a much smaller space. The clutter makes an already smaller space feel even smaller and cramped. Making the lack of a lot of storage space an even bigger problem.
Downsize if you want a fresh start and can make that difficult decision to get rid of a lot of your stuff before you move.
Don’t downsize if you need the storage and have no desire to change your furniture, decor or lifestyle.
2. How do you want to spend your time in retirement?
Many of my clients are travelling more often now that they have the time and means to do so, and others rent or own vacation property in warmer climates where they are spending their winters. For them it is an ideal situation to downsize to a condo.
The fact that condo owners can lock their door and leave for 6 months of the year is a huge benefit to many. No worries about who will remove the snow, cut the lawn, open the pool, check in on their home, or take care of the numerous maintenance chores that are involved with owning a home. They can pack up and go on whim.
Downsize if you plan on travelling a lot or vacationing in the winters, a condo can be an ideal purchase.
Don’t downsize if you’re more of a homebody, love gardening, still plan to be spending a lot of time in the yard, or enjoy yard work.
3. Will you really enjoy a condo lifestyle?
This is a big one for empty-nesters who have lived in a home for many years, have raised a family and are used to a certain lifestyle at their home that may involve large backyards, pools, barbecues and other activities. While many of these same features are offered in many condos, it’s not always the same when you’re sharing common spaces with other condo owners. They are used to the privacy and security that their home afforded them and are concerned about downsizing to a condo where others will be living in the building. This is a normal reaction and it does involve some compromises, but it also offers a huge amount of freedom and peace-of-mind.
Many condos have indoor pools, gyms, saunas, recreation rooms, rooftop terraces, movie rooms, security guard, indoor parking, elevators and more. My clients often find that having a pool in the building can be quite enjoyable (especially since they are not the ones having to maintain it!). Most concrete buildings will be soundproof, so there is little concern about the noise from other neighbors. Along with that pool however are higher condo fees to pay for it’s maintenance. When discussing downsizing to a condo, it’s important to discuss your lifestyle requirements with your realtor so they can identify suitable buildings in desirable locations.
Many of my clients who have lived in the suburbs find that they want to be closer to the restaurants, shopping, cultural attractions and activities, and buying a condo in town is a great way to be walking distance to all that Montreal has to offer. For others they want to remain in the suburbs closer to friends and family but without the headaches of maintaining a home, and there are a number of luxury condo buildings that attract a majority of buyers from similar age groups.
This question really comes down to which building with which amenities you choose. The right one with the features, owner-profile and location that meets your requirements will be a much happier experience than buying in a building that doesn’t match your requirements because it’s what you can afford. Just remember that there will always be an adjustment period as you are now living alongside other owners and sharing a building with them.
Downsize if you can afford to buy in a great building, that matches your lifestyle and activities.
Don’t downsize if your budget won’t allow you to buy in a building in your desired location and with access to the activities you enjoy. Also if you want 100% privacy condo living is not for you.
4. What about the cost?
Many of my clients are surprised that the price of larger luxury condos in great locations are often close to the value of their current home. For many their home is their biggest asset, it may or may not be paid off, and they are reluctant to transfer from their home to a condo if the price is similar.
They have the idea that they will sell, and receive a windfall, put a large amount of money in the bank or investments and downsize to an inexpensive condo with the remainder. While this may be possible in theory, when we sit down to discuss their requirements in a condo, their desired size, location and amenities often are anything but inexpensive! But it is a legitimate concern.
Many however don’t take into consideration the costs (both in terms of time, energy and money) to maintain their home, change roofs, update windows, and pay for the many contractors who may be needed to keep their home in top shape. Many of these are taken care of in the condo fees that are paid. With many co-owners contributing to the pot and only one roof, a few garage doors, etc. the cost to each condo owner goes down.
Homeowners often underestimate what their house actually costs them to maintain and when we sit down to go over the numbers and compare the costs vs a condo, they often see that they will be putting money in the bank with a condo.
The other thing is that many sellers who I meet are surprised when I tell them what the market value of their home really is. Homeowners often underestimate what their house actually costs them to maintain and when we sit down to go over the numbers and compare the costs, they often see that they will be putting money in the bank after downsizing to a condo. That combined with the savings of time and energy to maintain a home, versus a condo, the idea of downsizing can be quite attractive.
On the other hand many homeowners have high expectations of the quality and amenities they require in a potential condo. When we look at the numbers they are often trading a home for a condo, or worse the condo they want will cost more than the value of the home they are selling.
Downsize if the value of the home you are selling is more than the price of the condo you want to buy, or if its more ensure you can afford the increased price. If you are used to hiring help for yardwork and maintenance and you can afford them now, many condos usually won’t cost more in condo fees.
Don’t downsize if your house is paid off and you are used to doing the maintenance work yourself to save money. If your budget is tight for maintenance of a home, a condo may not be a better trade off. Also if your current home is worth less than the type of condo you want to buy ensure you have the means to afford the increase in price.
It’s a decision that each homeowner will either want to make or have to make when circumstances dictate it. Perhaps a condo will never be the right move, perhaps you have the means, energy and time to hire the right people to take care of your home and you can stay there well into your retirement years. But more and more of my clients are opting to enjoy their retirement without the time, money and aggravation that can come along with maintaining a home.
Either way you look at it, it’s a big decision that requires a lot of reflection and perhaps the help of a professional. If you are considering downsizing to a smaller home or condo, I invite you to contact me for a no obligation consultation to discuss your situation.