Things to consider when downsizing your home for retirement

4. The chance to future-proof your new home

For downsizers at the retirement end of the property cycle, finding a home or living arrangements suitable to the needs of old age is crucial. If you’re thinking of moving in with your adult children, for instance, first test the waters by spending meaningful time in each other’s company on a day-to-day basis. Get a professional if you need to make any modifications to make the home safer.

The layout of the home is important, too. Consider the suitability of a home with stairs for anyone heading into their seventies and eighties. And before deciding to buy into that gorgeous seaside village where you’ve enjoyed holidaying for years, it may be wise to rent a place there for half a year before making the big jump.

5. Granny flat and small second dwelling legislation in Victoria

Granny flats, now known as small second dwellings, can be a useful addition for housing dependents who want to be close by, but enjoy the privacy of their own space.

These small second homes on existing properties come with a few legal requirements:

• It must be on the same lot as an existing home
• It must be the only small second home on the lot
• It must not be subdivided from the main home
• Its floor area must be 60m² or less
• It must have a kitchen, bathroom and toilet
• It cannot be connected to a reticulated natural gas supply.

If you plan to build a new granny flat, you will need a building permit and sometimes a planning permit as well. Make sure to check your local council’s guidelines for any further restrictions and guidelines.

For insurance purposes, small second dwellings are considered ‘home improvements’ to your property and should be included in your regular building and contents insurance sum insured amount.

6. Sense of community 

Many downsizers are motivated by the need to find more manageable properties, but people shouldn't discount the rewarding intangibles of community. Proximity to family, friends, sporting and social clubs is important, and it can be hard to establish a new social circle, particularly when you’re older. A lifestyle club can be a way to meet like-minded people, enjoy new hobbies, and attend food, arts and sporting events. Again, trying before buying can give a realistic idea of what living in a particular suburb or town is like.

On the plus side, many modern high-spec apartment developments aimed at downsizing owner-occupiers offer communal facilities such as rooftop gardens, outdoor barbecue areas and even wine cellars, which can be a great way to meet the neighbours and become part of your new community. In fact, the opportunity to expand social networks can be one of the benefits of downsizing.

7. Need for personal space

How much personal space do you need? Do you want to live solo – or, if you’re moving with other people such as a partner, child or even a friend, do you need an ensuite, walk-in robe, study nook or a small sitting room to call your own?

It’s worth thinking about how much you entertain, too. If you love hosting dinner parties, you’ll need space for a dining table, and if you’re making a sea-change or tree-change, you might want to factor in a spare bedroom for all those friends who’ll be clamouring to visit.

8. Adapting to lifestyle changes

Downsizing is often synonymous with apartment living – and judging by the number of high-spec apartments aimed at the downsizing market, Australians have lost their traditional aversion to this European style of living.

Before you embrace the considerable freedom of the lock-and-leave lifestyle, stop to consider the proposition of privacy and neighbour noise. Moving from your own freestanding home to sharing a party wall with strangers can be confronting (if soundproofing is inadequate), and doubly so if you choose the wrong block and find yourself subjected to holiday rentals and late-night parties. Due diligence, including casing out the area on a Saturday night, may avoid a lot of sleepless nights and angst later on.

9. Reducing your possessions

When downsizing, the amount of 'stuff' you possess is likely to require a heavy-handed cull. It's recommended to triage your possessions into three categories: definitely leave, maybe leave and definitely take.

A professional service such as Homesuite can guide you gently through the streamlining process, but if you choose to go it alone, remember that there’s little use holding onto things that haven’t been used in years.

10. Finding the right furniture fit

If you’re downsizing to save money, you probably won’t want to take a chunk out of your profit by having to buy new furniture to fit the new space. Take a step back from the initial excitement of embracing a new lifestyle, and before committing to a new and modern abode, think about how your collection of antique furniture would look in such an ultra-modern setting. If it’s too much of a mismatch, it might not be quite right – for your furniture or for you.

11. Alternatives to downsizing

If you’re feeling pushed reluctantly into downsizing, it’s worth pausing to weigh up different ways of living. There may be other options.

If you’re suffering empty nest syndrome and an unsettlingly quiet house, you might consider renting out a spare bedroom to generate some extra cash, as well as company. It’s also becoming increasingly popular for retirees to share a home. Duplexes are another great way to stay close to your loved ones while enjoying your own privacy.

Alternatively, renting out your home long-term and striking out on the wide-open road as a grey nomad could be another winning idea.

^{The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. RACV Home Insurance issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.}