Our first home was about twice the size we needed it to be. Such a large space, we found, came higher expenses. Therefore, when we sold, we decided to downsize both our personal possessions and our living space. We ended up buying a much smaller condominium that afforded us the opportunity to cut costs in the process.
Here are some of the ways that we've discovered we can save money with our small condo.
With just a two-bedroom one bath condo, there isn't much space to have to heat and cool; and water and trash services are covered in our monthly assessment. This means that between natural gas and electricity bills, we're only looking at about $40 a month on average. Add this to costs for cable, Internet and phone, and we're still at only about $175, which is nearly $100 less than our previous home and about the same cost compared to living in a comparably sized apartment.
Since we went with a smaller, cheaper place to live with our condo as compared to our first home, we were able to do so without obtaining a mortgage. Not have a mortgage saved us money in several ways. Not only were we able to cut about $2,000 in mortgage-related costs from our settlement fees at closing, but we were able to eliminate the mortgage interest associated with such a loan that could have cost us additional tens of thousands of dollars or more over time.
It's not like we have to head out to the local home furnishing store to fill our sprawling two-bedroom place. In fact, even after downsizing many of our possessions after selling our first home, we are still left with too much stuff to fit into our condo. This means that rather than having to go out and spend hundreds or even thousands of dollars on new home furnishings, we'll likely be making some money as we take a few of our items to consignment or resale shops and prepare for a garage sale with the smaller stuff.
Property taxes at our last home were nearly $5,000 a year. Having grown up in a rural area myself, such costs came as kind of a shock when I first moved to the Chicagoland area. However, with our move to downsize, our new property tax rate is much lower. Our condo's property taxes run closer to $2,800 a year, which is still a bit high in my personal opinion, but we are in one of the best school districts in the state, and compared to our last home, it's a nice reduction in taxes.
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The author is not a licensed financial or real estate professional. The information provided in this article is for informational purposes only and does not constitute legal, financial or real estate advice. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
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