How to Downsize Your Home — at a Profit

by Vanessa Cameron

Strategically Time the Sale

Research market conditions: Sell during a seller's market when demand is high and inventory is low. This typically results in higher selling prices.
Seasonal timing: Home sales often peak in spring and summer. Consider listing your home during those busy buying seasons.
Watch interest rates: If rates are low, more buyers will be able to afford a higher-priced home, which can work to your advantage.
Consult with a real estate professional: For knowledgeable insights about each of these three issues. You can schedule an appointment with one of our advisors here.

Enhance Your House’s Value

Minor renovations: Small updates (e.g., fresh paint, new fixtures, or upgraded hardware) can boost your home’s value without significant investment.
Kitchen and bathroom upgrades: If your budget permits, minor remodeling of the kitchen or bathrooms often offers the highest return on investment.
Curb appeal: First impressions matter. Spruce up landscaping, repaint the front door, and make sure your home’s exterior is in good condition.
Consult with an Engel & Völkers advisor: To determine what will maximize the ROI for your property. Let us help you decide what is best for your most luxurious future.

Downsize to a More Affordable Home

Choose a smaller, less expensive home: When buying your next home, choose a smaller property in a less-affluent neighborhood or region to maximize your savings.
Invest in a condo or townhome: These often are more affordable and easier to maintain than larger single-family homes. They also can have lower property taxes and upkeep costs.

Leverage Tax Advantages

Capital gains exclusion: If you’ve lived in your home for at least two of the last five years, you may exclude up to a certain amount (varying by state) in capital gains if single or married when selling your home.
Retirement community tax breaks: Some areas or communities offer tax incentives for those downsizing or moving into age-restricted communities.

Declutter and Sell Excess Possessions

Sell unneeded furniture and items: Downsizing often means letting go of larger or extra furniture and belongings. Host a garage sale, sell online (e.g., Craigslist, Facebook Marketplace), or work with a consignment shop. Profits from these sales can offset moving expenses. Senior citizens should be particularly alert about their personal and financial safety when engaging in such sales.
Consign or donate: Higher-end items can be sold through consignment stores, while donating can offer a tax deduction for charitable contributions.

Choose the Right Location

Relocate to a less-expensive area: Consider moving to a location with lower living costs, property taxes, or housing prices. This could be a nearby town, a different state, or even an area with favorable retirement benefits.
Look for growing markets: If you're buying in a growing area with increasing property values, your next home can appreciate over time, adding additional profit.

Minimize moving costs

Shop for moving deals: Compare quotes from various moving companies and schedule your move during off-peak times (mid-month or weekdays) for lower rates.
Downsize before you move: Reducing the number of items you move can lower moving costs, especially for long-distance relocations. The fewer items you take, the cheaper your move will be.
DIY moving: If feasible, rent a moving truck and move yourself with the help of family and/or friends to save on professional movers.

Consider long-term financial strategies

Rent instead of buy: If you're unsure about your next step, renting may offer flexibility while allowing you to invest the profits from your home sale.
Invest the equity: After downsizing, and with guidance from a financial advisor, consider investing some of the equity from your home sale into income-generating assets (e.g., stocks, bonds, or rental property) to grow your wealth.

Plan for your future lifestyle and needs

Low maintenance: Opt for a home that requires less maintenance and lower utility bills, allowing you to save on long-term expenses.
Accessibility: If you're downsizing for retirement, choose a home that will suit your future needs, such as single-level living or easy access to healthcare and services.

By focusing on the right strategies and timing with guidance from an Engel & Völkers Asheville advisor, you can downsize your home while generating a significant profit and setting yourself up for a future with greater financial flexibility.