Is downsizing to a smaller home right for you?

Downsizing your house can help save you money and time on maintenance, but there are tradeoffs. Here's what to consider.

Woman and daughter downsizing to a smaller home.

If you're planning to retire, you have plenty of reasons to consider downsizing. You might be an empty nester or just tired of yard work. You may want to travel more or trim expenses. Whatever the reason, you have options, including downsizing from house to condo or downsizing to a smaller home. Here's how to decide what you need and what works best for you.

Cost benefits

Winner: Condo

  • Lower overall mortgage/cost: The median price of a condo in the United States is $25,000 less than a house.
  • Fees: Some cost savings may be lost to monthly homeowners' association (HOA) or condo fees. In addition to amenities, these fees typically cover exterior maintenance, which can save on your own investment of hours and out-of-pocket expenses compared with owning a home.
  • Insurance and taxes: In general, if a condo is smaller, it may have lower insurance costs and property taxes than a stand-alone home.

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Personalizing your home

Winner: A smaller home

  • Exterior modifications: Unless you buy in a neighborhood with a strict HOA or restrictive local ordinances, downsizing to a smaller home doesn't limit what you choose to do outside. For example, you're more easily able to change siding, add a fence or decorate however you like.
  • Additional uses: Condos may restrict how the property can be used, such as whether you choose to rent, sublease or even run a business from your home.

Leisure time

Winner: Condo

  • Maintenance: Even a smaller home requires a time investment in certain regular tasks such as yard work and snow removal. If you're downsizing from house to condo, those chores are completed by someone else and paid for by HOA fees. Also consider if you depend on your exterior space to entertain or garden; those options may not be available to you in a condo.
  • Amenities: One of the selling points of a condo is access to extras such as a swimming pool, tennis court, gym or golf course.

Privacy and social life

Winner: Toss-up

  • Neighbors: In some condos, you may share walls, which may impact the level of privacy and soundproofing. However, owning a home is no guarantee that you'll have the types of neighbors you want.
  • Community: An HOA may schedule activities or gatherings that provide more opportunities for congregation and conversation.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

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