We homeowners often dream of making changes to our homes. We may dream about a remodeled bathroom, for example, or of planting a vegetable garden in the backyard. There's a less common way to change your home, though, that may be of interest to you -- because it can make you richer: Shrink your home.
That's right. I'm suggesting that some of us might want to consider selling our beloved abodes and buying something smaller and less expensive. In a recent Money magazine article, Jean Chatzky reported results from a survey of people thinking about selling their home. Some 30 percent were considering a sale because they wanted less space, while 23 percent were most interested in taking profits and 20 percent sought lower taxes. Good reasons, all. Less space means less dusting, lower heating and cooling expenses, and perhaps less clutter, too. Taking profits by selling a home for, say, $400,000 and buying one for $250,000 means that you'll have a nice chunk of change to invest -- or spend, to serve your needs and/or desires. And lower taxes ... well, who wouldn't welcome lower property taxes?
Here are some interesting facts Chatzky shared:
- "In 1970 the average U.S. home was 1,500 square feet with three bedrooms and one and a half baths. Today that average home is more than 50 percent larger, replete with an island in the kitchen, walk-in closets, and more bathrooms than occupants."
- The gradual growth in home sizes appears to be finally leveling off. A book on small homes has been a big seller, and small-home designs are selling briskly.
- If you downsize from a 3,200-square-foot home to a 2,400-square-foot one, you may save around $6,500 if you live in Kansas City, Mo., $14,000 if you live in Sacramento, Calif., and roughly $17,000 in Scotch Plains, N.J. These numbers include mortgage expenses, property taxes, utilities, maintenance, and insurance.
A recent Milwaukee Journal Sentinel article pointed out another reason to downsize: When we move into our golden years and fail to downsize, we often end up trapped in large, costly homes -- perhaps too weak or sick to deal with all of the work involved in selling and moving. The story profiled Milwaukee-area businesswoman Jody Wallace, who runs a firm helping those who can't handle various daily demands. Here's an excerpt.
Seniors constitute 85 percent of her clientele, and helping them downsize has become a primary focus of her business. "Many 70- and 80-year-olds are holding on to their homes even though they have become a prison," Wallace says. "When this happens, they struggle and spend all their energy and money on household chores and upkeep." ... Often they wait so long, opportunities are missed. These days, downsizing doesn't mean a trip to the "old folks" home, or settling for a tiny apartment. It can mean beautiful condos in exciting places, and retirement communities packed with activities. Wallace said that seniors can be so frail and inactive by the time they downsize that they can't take advantage of all that life suddenly has to offer right outside their doorsteps.
If downsizing might be right for you, give it some thought. It can help you ease into a much more comfortable retirement.
One option to consider is a manufactured home, such as those offered by Berkshire Hathaway's Clayton Homes. (See plans for homes ranging from fewer than 1,200 square feet to more than 2,500 square feet.) Champion Enterprises offers manufactured homes as small as 400 square feet. Fleetwood Enterprises also offers manufactured homes -- and recreational vehicles, too. Moving into an RV for a short or long while is something many retirees have done and enjoyed.
Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway. The Motley Fool has a disclosure policy.