Downsizing – Reality Check
Top 5 things to keep in mind when downsizing
1. Why are you doing this?
You should be clear in your mind about why you are selling your GTA home. This will help determine how you would utilize the proceeds from the sale of your home. While you may have many aspirations, the reality is that you may be needing the money for some other crucial requirements. Regardless, you need to have a plan on how you will use the money. Are you doing this for financial or practical reasons? Have your adult children moved out and now the home is too large for you? Have you lost your partner? You want to live somewhere closer to your grandchildren? You would like to travel 4-6 months of the year? Just tired of the upkeeping a detached home? You need to be certain that finances will work in your favour and that you are mentally prepared to move from potentially a larger home to a small condo.
Are you selling to buy a condo townhouse or a condo apartment?
You will need enough money to pay the monthly condo maintenance fee. Monthly condo maintenance fee can range from 0.50 cents to 0.65 cents per sq. ft. for a condo in Square One, Mississauga. Not to forget any other maintenance costs that are not covered by the condominium corporation.
Are you selling to become a renter?
You will need to set aside money to pay the monthly rent. Hydro costs may be separate in some cases. If you have pets, you will need to ensure to rent in a pet-friendly building. Many downsizers consider renting for a year, before they plunge into home ownership again.
Are you selling to move from the country?
You could be cashing out to move out of Canada altogether. Consider any CRA regulations on moving money out of Canada.
2. What are the first steps for downsizing?
Of course, a worry free downsizing move should be on top of your mind. Get an idea of what it’s worth, and then price out the sort of condo or small house you’d consider living in next. The difference, minus real estate commissions and moving costs is the money available to add to your retirement fund. Here are some real estate downsizing steps to explore.
3. What are you expecting from the home sale?
If you have a paid-off mortgage, you could tap into some of that wealth and enjoy a dream retirement. But if you are downsizing from a $600,000 home to a $500,000 one, there won’t be much of a nest egg left. Remember, there are real estate seller buyer agent commissions, legal fees, land transfer taxes, any outstanding property taxes, and of course the balance on the mortgage. And after you move to your new home, you may have to spend some money on home improvement or furnishing.
4. When should you sell and buy?
Toronto and Mississauga housing market has been having a great run, helped by steady interest rates, and high demand for low rise homes. So yes, now is a near perfect time to think of selling your home to buy elsewhere. I say near perfect only because selling in a hot market could also mean having to buy in a hot market. However, if you are moving from a home to a condo, and to top it off, if you are moving from Toronto to Mississauga, or another city in the west GTA, you are potentially talking about substantial savings.
Home values are on an incline tempting baby boomers to downsize and cashing out. The other benefit is that baby boomer sellers will likely avoid paying capital gains tax on the sale of the home as it is their primary residence.
In fact, we have moved many of my baby boomer clients by selling their Mississauga homes and buying them condo apartments at Square One and Churchill Meadows.
5. Where do you plan to move?
If you are uncertain and are looking for a price idea to help decide, here’s a flavour of what price you can expect to pay for a condo townhouse and apartment in today’s market:
Bungalows in Mississauga
1-Bedroom Condo for Sale in Mississauga
2-Bedroom Condo for Sale in Mississauga
3-Bedroom Condo for Sale in Mississauga
Booking a builder new condo in Mississauga is not a bad idea if you are planning to downsize in the next 2 or 3 years. Team Amit Kalia specializes in the Mississauga condo market, we can help you choose the condo projects that best match your lifestyle, budget and other needs.
Once you make up your mind on downsizing real estate – Let go!
Saying goodbye to the family home where you hosted friends and family for holiday dinners and other special occasions for decades can be an emotional farewell decision. But isn’t reducing the number of rooms that you need to clean, such a luxury?