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Renovate or downsize?

Jean Porter and her husband Lloyd could be considered the poster couple for empty nester downsizing.

Their journey started two years ago, as they prepared to downsize from their large family home that they'd owned for 30 years. It was the house where they'd raised three children and still hosted large family gatherings with in-laws and grandchildren.

"We'll miss the house but we're fairly comfortable with the move. I think we're ready and we certainly don't need all this space," says Porter. "It's also a great opportunity to downsize all of the stuff we've accumulated."

The Porters will soon take up residence in a bungalow that they've purchased outside Toronto where their two daughters now live. Not only is it more modest in size, it has fewer steps and a main-floor laundry.

While the Porter family chose to downsize, another option is to renovate an existing home to make it more suitable for seniors to age in place. If you, or a family member, are trying to decide which option is best, here are a few considerations:

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Leaving stuff, taking memories
Gina Ryder, a long-time real estate agent with Royal LePage based in Toronto's Beaches area, specializes in selling condominiums. Her clients are generally young people getting into the housing market and empty nesters or seniors moving from a family home into a more manageable or affordable condo.

She's seen the challenges some homeowners have with downsizing. "Taking too much stuff when downsizing into a smaller home is the number one mistake people make," she says, adding that the Porters' measured approach to downsizing is impressive.

"It is difficult leaving the family home that has so many memories," she says. "But it is particularly difficult if the move happens suddenly."

This can occur because of ill health, losing a spouse due to death or divorce, or because of finances. With home equity being the greatest asset many Canadians have, selling may become necessary in cases where someone is house rich but cash poor.

Be realistic about finances
Ajaz Haque is a chartered accountant and financial adviser with Industrial Alliance Securities Inc. in Toronto. When counselling clients on retirement issues, he says having a plan is the central instrument in financial stability.

Many homeowners think that if they hang onto their house it guarantees them financial security as they age. Not necessarily, says Haque: "Without a plan that factors in how much you'll have and how much you'll need, you're just staring into the darkness." He adds, "A house only gives you a place to live; it doesn't give you an income."

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-- Posted May 4, 2011
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