Luxury cars, cumbersome ski gear, guest rooms, a very spruced up guest bathroom, the second TV… these are only a few of the ways in which you can demonstrate your own success, the belonging to a ‘better’ social class. Collecting thousands of objects which are losing their value throughout time, possessing some spaces that require a full day of maintenance — a wellbeing which is often misleading.
Downsizing is applied when families own a house that is above their necessities. Nowadays, it is not uncommon to see that, depending on the occasion, families tend to move into larger houses: a significant sale, an unexpected inheritance; in most cases, ‘to expand oneself’ is emotionally satisfying, but rationally speaking, it is less convenient and justifiable.
Buying a very big house straight away, a place to grow a lot of children, might seem a prudent choice, but the family’s economic resources, the neighbourhood, the market opportunities can change by turning all projects upside down.
The Downsizing Advantage
When we talk about downsizing, we mean the transition towards a smaller-sized house. The issue is particularly discussed in the United States and Australia, where the dimensions of houses may exceed 200 square meters; Italy is more moderate with its 81 m², although a lot of Italians would like bigger households.
First of all, selling a large house in favour of a modest one can generate a ‘tidy sum’ to invest. Supposing we sold a house for €300,000, and we bought another one for €180,000, cautiously considering €20,000 for practice, fees and relocation expenses, we would earn €100,000, whose 3% of interest yields a monthly €250 income — an amount useful to many families. And a house valued less is usually more resalable.
Moreover, a smaller-sized house requires less energy for heating and cooling, has lower insurance costs, is subject to fewer state fees and waste disposal fees; but most of all, maintenance: renewal of doors and windows, a smaller heater, painting, garden maintenance, etc.
We also see an impact on a hypothetic mortgage, taking into account the houses from the previous example: a €250,000 mortgage, considering a deposit of €50,000 for 20 years, consists of a monthly payment of about €925; a €130,000 mortgage (same deposit and duration) consists of a payment of €428 — 46% of the commitment. Besides being useful to have this lower burden, it also prevents the risks of a missed payment.
A Perfect House
But, which is the perfect house? The perfect house is not needed to make an impression on your friends, it does not need to exceed the family’s economic resources, nor does it need to be the result of a social expectation. It must have the adequate dimensions, to provide the family with comfortable space according to long-term needs (10 years), and it needs to be sustainable, both economically and timewise.
Of course, there needs to be some space to contain “all the stuff”, but it is better to get rid of the superfluous first; stealing some time from maintenance and renovation to better employ it in enjoying life.