Do it now: Run the numbers. If you’re already a homeowner, you're aware of the costs of maintaining a property, from utility bills to upkeep. But some of the expenses of a bigger home may surprise you. “All of a sudden you have a much larger driveway, so you probably have to hire someone to do the snow blowing for you, and you have to get a gardener in because you can’t mow the acre lot you have,” Gudell said. “These can be expensive ticket items and people’s time is limited and you can only do so much during the day. Size brings extra maintenance.”
The age of the home also has a bearing on the cost of upkeep. Some older homes require more maintenance. “There could be additional costs you haven’t considered, like changing out the water heater or replacing the roof,” Gudell said.
Remember transaction costs. Unfortunately, selling your current home and buying a new one aren’t free. Those deals come with realtor fees, mortgage fees and moving costs. Consider whether you’re going to stay in the new house long enough to make it worth your while. “If your time horizon is short, I would consider staying in your current home and making that work,” Gudell said.
Think about resale value. In some US cities, smaller homes in more urban locations are selling faster than larger homes in the suburbs. So if you’re upsizing to a manse on the outskirts of town, it could take a while to offload your property if you choose to sell it. Make sure you consider whether the home has other qualities that will attract buyers, such as proximity to good schools, access to public transportation and an appealing neighborhood setting.
Save up for the unexpected. No matter how much you prepare, you simply don’t know what expenses may pop up. “The need for a $5,300 house-wide water filtration system was a surprise to our checkbook,” said Andy Walker, 48, who moved from an 1,100- sq-foot (102-sq-metre) house in Toronto, Canada, to a 2,950-sq-foot (274-sq-metre) house in Florida.
Garden care has also been an issue for Walker, who runs two businesses and must hire help. “It’s $60 a month for grass cutting, $35 per month for termite and bug spraying and $45 for fertilizing and tree care,” he said. “We have palms in our front yard and if you don’t tend to them, they die easily and cost $300 to $600 to replace.” That doesn’t include the $5,000 fence the family is going to install to keep their pets and two-year-old son away from a nearby lake — which is home to an alligator.
Do it later: Take your time with the decor. Just because you doubled your space doesn’t mean you have to double your furnishings right away. “We lived for the first year with empty rooms because we [couldn’t] afford new furniture,” Walker said. “We still don’t have bedside tables.”
Beware lifestyle inflation. A larger home also doesn’t have to lead to a nicer car or fancier vacations. If you use your new address as an excuse to splash out on bigger and better stuff, you may find yourself in dire straits financially. (Remember retirement? Keep saving for it.)