{"id":19127,"date":"2020-07-29T15:44:29","date_gmt":"2020-07-29T20:44:29","guid":{"rendered":"https:\/\/www.abodo.com\/blog\/?p=19127"},"modified":"2020-08-02T18:23:00","modified_gmt":"2020-08-02T23:23:00","slug":"downsizing-from-ownership-to-renting","status":"publish","type":"post","link":"https:\/\/www.rentable.co\/blog\/downsizing-from-ownership-to-renting\/","title":{"rendered":"5 Tips to Downsize to Renting From Homeownership"},"content":{"rendered":"

Overwhelmed by home maintenance or looking to free up extra cash to travel? Downsizing to a rental might<\/a> be the right fit for you.<\/span><\/p>\n

While homeownership comes with many benefits, the biggest being that you get to build equity, renting can be better for your monthly budget.<\/span><\/p>\n

The typical U.S. homeowner in 2018 \u2014 according to current census data \u2014 coughed up a median $1,558 per month for their mortgage alone<\/a>, not including hundreds more in bills and upkeep. Renters, on the other hand, were paying a median $1,343 per month in rent.<\/a><\/span><\/p>\n

If you\u2019re downsizing from homeownership to a rental property, here are five tips to make the transition a smooth one.<\/span><\/p>\n

1. Run all the numbers\u00a0<\/strong><\/h2>\n

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Most folks who are downsizing are looking for a way to cut costs, perhaps because of the end of unemployment benefits from COVID-19, but many find themselves shocked by the expenses that can stack up.<\/span><\/p>\n

Your new rental does come with fewer monthly costs (a single rent payment instead of paying for water or heating) and less responsibility.<\/span><\/p>\n

However, you also need to take moving costs and storage for your belongings into account. If you’re moving into a smaller space to save even more money, you should remember that means less room for all the things you\u2019ve accumulated.<\/span><\/p>\n

If you\u2019re just ditching everything, you\u2019ll have to furnish your new place. If you plan to keep all your stuff, despite reduced storage space, that\u2019s a storage unit charge of $60 to $180 on average greeting you every month.<\/span><\/p>\n

Consider also that depending on whether you\u2019re moving to a new state or town, the cost of living may be higher. When you move far away from your family and friends, say from Maryland to Florida, traveling back and forth will cost you a lot more, too.<\/span><\/p>\n

Draw up your monthly cash flow and compare your renting scenario to your current ownership scenario before taking the plunge. Downsizing may not pay off in your specific situation without some tweaks.<\/span><\/p>\n

2. Check if it\u2019s a good time to sell<\/strong><\/h2>\n

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The key to any downsizing plan? How much you get for your house. Realize that you can\u2019t plan to time the market, but you can still take advantage of a seller\u2019s market and seasonal trends in the real estate industry.<\/span><\/p>\n

Downsizing to a rental property, instead of purchasing another smaller home, allows you to keep <\/span>more<\/span><\/i> of the cash from your sale.<\/span><\/p>\n

Experts say spring is normally the best time to sell your home; homeowners can expect to sell up to ($313,200 in America, up close to <\/span>30%<\/b> (<\/span>$93,700) <\/b>since 10 years ago.<\/span><\/p>\n

Because of rock-bottom mortgage rates and decreased housing supply during the coronavirus pandemic<\/a>, demand for homes has shot straight through the roof. Folks looking to downsize now might find eager buyers trying to close quickly.<\/span><\/p>\n

3. Make a wish list<\/strong><\/h2>\n

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Before you start searching for the perfect apartment \u2014 ensuite, walk-in closet, bamboo zen balcony \u2014 consider <\/span>why<\/span><\/i> you\u2019re choosing to downsize.<\/span><\/p>\n

For the most part, downsizers are just looking to lower their monthly debt, simplify their lifestyle, move closer to family or dodge physical maintenance. (Weed wars are killer.)<\/span><\/p>\n

Once you\u2019ve homed in on your specific reason, it\u2019s time to make a wish list.<\/span><\/p>\n

Ask yourself key questions like:<\/span><\/p>\n