Strategic downsizing = live it up option : – )
While the family home concession announced in the Federal Budget this month was aimed at home owners 65 and over, the rampaging property prices from Sydney and Melbourne have caused a broader group of home owners to consider their options.
Current attention is largely focused on ‘traditional’ downsizers who doggedly remained in the family home despite hardships or mounting safety issues. Their focus was often to remain close to friends, familiar surroundings and to “be carried out feet first” as my grandfather would say.
The baby boomer generation however are acting differently. As they have done throughout their lives, the boomers are re-writing the traditional approach to how they live their lives. And in relation to the family home, the boomers are not alone.
Eye-watering property value growth in Sydney and Melbourne has opened up significant opportunities for anyone who purchased their home before 2013. Generally, most property located in Sydney and Melbourne suburbs has doubled in value in the past four years.
This jackpot means that selling the family home can deliver the lifestyle most could only dream about, and the strategic downsizers are already taking action. They’re capitalizing on a window that is beginning to close, albeit not in the way the general media would have us believe.
What’s so great?
Strategic downsizers are selling their homes, paying down their home loans and then purchasing another home along with investment properties which replaces their incomes. Yes, it does mean leaving the big smoke, but most are happy to say goodbye to the rat race and hello to a secure lifestyle where living it up is the name of the game.
This strategy also means that ‘getting the pension’ is not the focus. Strategic downsizers have seen what happens to those who rely on the government for their future income, and are taking matters into their own hands.
The case study outlined above is just one of a multitude of approaches strategic downsizers are using to create lifetime income. The focus is to take true control of the future, and build a lifestyle based on interests and flexibility. Good research and planning is required to ensure opportunities are maximized, however this fresh way of downsizing offers numerous pathways.
One minor cloud on the horizon is the potential for the window of opportunity to close. Interestingly, from our perspective and observations, the snag on the horizon is not the softening of Sydney and Melbourne prices as hyped by the general media and other ‘experts’.
The issue of concern is how quickly property prices in other key areas will increase as those who are priced out of Sydney and Melbourne start to buy elsewhere. This is already beginning to happen. Locations such as Hobart, Newcastle, Wollongong, and the Sunshine Coast are attracting serious heat with low days on market and rapid capital growth.
If you think strategic downsizing might suit your situation, the following steps will help you prepare.
- Your first port of call should be to a respected and service focused real estate agent in your local area. They will help you understand a realistic sale price for your property, and provide you with an overview of costs, timelines and how the process works.
- Review your budget and goals. Review your expenses to understand the level of income you will need to maintain the lifestyle you want to achieve.
- Speak to a specialist property strategist who can help you plan out the range of property you can purchase to achieve your income targets. Avoid ‘advisors’ who only sell new property as this will limit your choice and ability to maximize returns.
- Meet with your accountant or financial advisor to obtain information on the best entities and structures to support your goals.
There’s one more lovely benefit to strategic downsizing, and that is your opportunity to create family wealth. Purchasing property with a view to unencumbered continuous income is a great legacy for you to leave to those you love. The fun part is that you get to live it up while still delivering on the inheritance.
If you would like to explore opportunities that strategic downsizing might provide you, don’t hesitate to contact us at Crave. We offer a free one hour consultation where we can outline the range of options matching your requirements.
Buy smarter = limitless ways to build lifetime income
Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property. A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income.
Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. A licensed real estate agent, Debra also holds a Bachelor of Commerce and Master of Business.
Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.
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