I’ve had quite a few conversations lately about clients downsizing. The kids have moved out and you may not need as much space as before. Maybe you’re just done walking up and down stairs. Not using the pool anymore? Well, downsizing might be a good idea.

In many cases, we can give up some square footage, get rid of clutter, and simplify our lives. If we’re really lucky, we can make out financially at the same time. One option is to rent out our existing house and, if it’s paid off, use the rental income to pay the monthly expense of a new home, or, maybe you decided to rent this time around; maybe a condo or townhome.

Some folks decide that they don’t want to be a landlord and would rather just sell the existing house and use the proceeds to buy the new, smaller, less expensive, home. Well, that could be a double win! The excess gain can be invested and used to create additional income. Who couldn’t use additional income? Even if you decide to have a mortgage on the new home and only use some of the proceeds from your last house as a down payment, the balance can be used to invest and create an income to maybe cover the mortgage payment and then some.

Our financial team here at American Retirement Advisors is equipped to assist you with running the numbers to see if these are good options for you and your family. It doesn’t hurt to explore your options.

If you want to stay in your home but would like to have some extra income, next month I will write about Reverse Mortgages. Are they a good idea or just a bank gimmick?