Deciding to upsize or downsize your home comes with a range of challenges but also benefits. And with the Federal Government’s $25,000 HomeBuilder grant currently available, you may be contemplating building a new home if your financial, lifestyle or family situation has changed. Here we look at some of the reasons people choose to instigate a change of residence and some of the benefits that can be gained from doing so.
Why do people downsize?
Downsizing your home may involve the relocation to a smaller unit, villa, townhouse, house or retirement village, or renovating your current property to include a duplex that you can rent out for investment purposes.
One of the main reasons people downsize is because they are shifting or consolidating their financial priorities. This can be due to them becoming ‘empty nesters’ after their children have left home, which can involve wealth diversification and a change in lifestyle … away from child-rearing!
Reaching retirement age is another common reason for downsizing, which can help open up equity for health cover and aged care, and create opportunities for short-term wealth by an investment in a higher-yield property.
Surprisingly, parents with children also often consider downsizing. This is because sacrifices in terms of lifestyle may result in them being able to access more schooling options than might be available in a larger home further out of the city.
Benefits of downsizing
Downsizing offers a range of benefits, including:
- A fresh start. While letting go of your family home and possibly some sentimental possessions can be difficult at first, it can also be liberating.
- Less home maintenance. Fewer rooms, smaller backyards and smaller gardens mean less work to do and more time to enjoy your favourite activities.
- Cost savings. Reduced insurance costs and utility bills and less money needed for upkeep can free up cash flow for things you enjoy, from travel to exploring new hobbies.
- A better location. Downsizing could mean being closer to friends and family, being a part of a community in a retirement village, or having access to more amenities like public transport and entertainment precincts.
Why do people upsize?
One of the main reasons behind a decision to upsize is because of a growing family — whether it’s due to starting a family, the appearance of a new family member, or existing family members that are just getting a little bigger! Or you may choose to upsize your home because you’d like your children to experience life in a country or coastal town, or on acreage where they have plenty of space to explore and play.
You may decide elderly family members need more assistance with living arrangements and your priorities need to shift to accommodate them. Or you may experience an increase in income or the need for a home office, so upsizing your home is the only option!
Benefits of upsizing
Upsizing offers a range of benefits including:
- Government incentives. The Federal Government’s HomeBuilder grant offers owner-occupiers $25,000 to build a new home or renovate an existing home.
- Wealth generation. If you can afford to rent out your existing home as an investment property, it will give you a source of income for your new home’s mortgage. Tax-wise, you may also be able to claim the interest you pay on your mortgage, and a deduction on the depreciation of the building’s structure and any renovations done.
- Upsizing can afford you the benefits of a new neighbourhood, whether it’s a wider choice of lifestyle enhancers (like restaurants, shops and parks), or a location closer to friends, family, work or schools.
- More space. A bigger home can allow you to de-clutter, provide an opportunity to entertain more, and if you have a growing family, give everyone a little more room for themselves!
- If you can’t afford to build or buy a completely new home, there is also the option of ‘building up’ to another level, or reconfiguring a floor plan to maximising every inch of space available.
Considering a lifestyle change and need help with an upsize or downsize? As a family-owned business with over 25 years’ experience, building is in our blood. Contact us or phone (07) 3050 5652.