Adding Value by Dennis O'Hagan

5 Reasons Investing in Outdoor Space Pays Off...

RISMEDIA, Wednesday, December 25, 2013— Increasingly, homeowners around the nation are investing in their outdoor living space. In fact, the majority of homeowners surveyed by American Express revealed that they have plans to engage in some sort of home improvement project in the next year. The outdoor living and landscape sector has grown into a $60 billion per year industry, according to IBISWorld, a market research firm. Investing in outdoor living provides a good return on investment for most people, making it an ideal home improvement project.

“Many people are finding that they want to get back to spending more time outdoors,” explains Bob Dallas, the chief executive officer at UltraOutdoors.com. “People also want to put money into their home improvement projects where it is going to pay off. Outdoor living is a logical choice that fulfills both of these needs.”

Here are 5 reasons investing in outdoor space pays off:

Resale value. HGTV claims that homeowners recoup 65 - 90 percent  just by adding a deck. Experts agree that investing in your outdoor living space will add to the value of your home. When you put money into this area, a lot of it will come back to you, when and if you decide to sell your home. Buyers will like the fact that your home includes nice outdoor living features and spaces.

Personal enjoyment. Most people could use a place to unwind and de-stress. Having a relaxing outdoor living space will create an environment where the family can relax together and enjoy each other’s company.

Save money. Consider how many times a family leaves home in order to seek out something that could have been in their backyard. This includes leaving to use a swimming pool or going to the park. Create the environment you are seeking in your own backyard, and save the gas and fees of taking your recreation elsewhere.

Entertaining opportunities. Having an ideal outdoor living space creates an oasis for entertaining. Whether hosting a holiday gathering, Friday night s’mores around a bonfire, or an outdoor picnic-style potluck, you will have a great place to pull it off.

Benefits of nature. There are mounds of research demonstrating the many benefits of spending more time outdoors. These include such things as reducing stress, improving mental clarity and mood, improving concentration, and more. Many people find that spending time outdoors is the cheapest form of therapy there is, and it’s good for all ages.

“The pay-off from investing in an outdoor living space comes in many forms,” added Dallas. “Not only is it good for the value of your home, but it’s a solid investment for creating great recreation and entertainment spaces, and giving your family a relaxing area where they can re-charge their batteries.”

There are many outdoor living options to choose from, including outdoor fireplaces, kitchens, pools and water features, patios and decks, gazebos, sitting areas, and landscaping. The key to having the outdoor oasis that fits your needs is to work with a professional to design a custom plan.

Source: www.UltraOutdoors.com

Mortgage Changes to Know in 2014...

RISMEDIA, Thursday, December 19, 2013— The New Year is almost here, and with it comes a bevy of legal and regulatory changes, especially for the mortgage industry. To help potential homebuyers understand how the changes will affect their mortgage processes, Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), outlines some of the regulations set to start in January 2014.

“Since 2009, the housing market has been working to create standards and regulations that minimize the risk of another mortgage industry fiasco,” says Frommeyer. “The ability-to-repay mandate is a perfect example of this and it exemplifies how mortgage professionals are taking extra caution with every customer.”

Upcoming mortgage industry changes include:

-          Ability-to-Repay Mandate: The CFPB designed this regulation to set a gold-standard for lending to ensure each and every borrower is a qualified borrower. Lenders will follow a set of guidelines to establish a consumer’s income, assets and obligations before deeming them eligible. The CFPB rules establish a standard for what the government considers a “qualified mortgage.”

- Decrease in FHA Loan Limit: The Federal Housing Administration (FHA) announced that beginning January 1, 2014, mortgages will be limited to $625,000, down from $729,750. Homebuyers looking to obtain a larger loan will have to apply for a jumbo loan, which will most likely come with a higher down payment. “For many areas of the country this change won’t be a huge issue as average home prices fall below the established limit. However, borrowers in metropolitan areas with higher average housing prices may face challenges when applying for mortgages as the 20 percent down payment associated with jumbo loans will be an enormous increase from a traditional loan’s 3.5 percent down payment,” notes Frommeyer.

-          Caps on Loan Origination Fees: January 10, 2014 brings a rule for the Qualified Mortgage that points and fees on mortgages cannot exceed 3%.

-          Tighter Regulations for Self-Employed: As the rules to create a QM (qualified-mortgage) take effect, people without a W-2 will face difficulty when they apply for loans. It’s more of a task for individuals to prove their debt-to-income ratio without the proper documentation, even if they have a high net-worth and perfect credit. The income is calculated bringing into play the customer write offs to reduce taxable income.

For more information, visit www.namb.org.

Benefits of Real Estate Investment vs. Stocks and Bonds...

RISMEDIA, Saturday, November 30, 2013— As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.

"Investor demand for single family properties remains strong," says Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. "Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives."

Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment -- approximately 12 percent gross according to the same study by Zelman & Associates.

Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.

Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor's pocket, covering the mortgage, repairs and additional homeownership costs.

Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.

Cash Sales Are Now 50%...

More than half of all homes sold last year and so far in 2013 have been financed without a mortgage, according to an analysis by economists at Goldman Sachs Group.  According to the analysts, 20% of all homes sold before the housing crash were “all-cash” sales, or around 30% of sales by dollar volume. But that has changed dramatically over the past seven years. Now the all-cash share of home sales has more than doubled, increasing by more than 30 percentage points.  Who is making all these cash purchases? Investors, foreign buyers, and wealthy homeowners that likely do not want to go through the hassle of getting a mortgage.

- Wall Street Journal, August 20, 2013.

 

Confidence in Housing Rises Sharply Among Millennials...

As the housing industry mends, younger Americans are expressing greater confidence in the market, according to results from Prudential Real Estate’s Q2 outlook survey.

Of the 2,600 millennials surveyed in Q2, 71 percent said their perception of the housing market is “favorable,” up from 65 percent in Q1. In 2011, only 52 percent of Americans aged 25 to 34 held a favorable perception of the real estate market.

The respondents were also optimistic toward real estate and home values, with 83 percent expressing confidence compared to 77 percent in Q1.

Millennials also placed strong emphasis on aspects of homeownership that had more to do with ideals and emotions rather than finances.

“People are looking optimistically at housing for all right reasons – a place to feel secure, build a future and raise a family,” said Earl Lee, CEO of HSF Affiliates LLC and president of Prudential Real Estate.

For example, 70 percent said finding the right home and community is crucial to family happiness, while 93 percent said they favor owning for more space to raise a family.

Seventy-six percent also said owning is a key part of the American dream, while 92 percent said homeownership gives a sense of pride or accomplishment.

Meanwhile, 75 percent said owning provides “financial security to borrow against.”

Even with rising rates, 78 percent of respondents said homeownership is valuable regardless of the rate hikes.

However, rising rates are prompting millennials to act faster, with  71 percent stating they are encouraged to buy a home now rather than later.

Sixty-five percent young Americans surveyed also said they watch rates closely, yet 43 percent said they believe rates are holding steady or falling even though rates have been on the rise.

In order to find the right home,  63 percent of respondents indicated that a good agent can help them make the right choices.

Most millennials still view mortgage financing as a challenge, with 57 percent stating securing a mortgage is more difficult than it ever was prior to the market crisis.

Home Prices Jump 9.3% Nationally in One Year...

Home prices are rising at the fastest rate in years, with some communities seeing double-digit gains, as buyers are returning to a market where the number of properties for sale is in short supply.  Prices increased 9.3% in February from a year earlier.  In some of the hardest hit markets, the gains have been particularly heady.  Home prices rose 23% from one year ago in Phoenix and 18.9% in San Francisco.  Nationally, the median home price in March stood at $184,300, up from $154,600 in January 2012.

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Wall Street Journal, May 1, 2013

What Paying Off Your Mortgage (Or Not) Means to Your Retirement...

RISMEDIA, Tuesday, April 16, 2013— (MCT)—Conventional wisdom says you need 70 percent of pre-retirement income to keep the same lifestyle after you stop working.

That makes sense if you’ve been putting away more than 20 percent of your income in your final working years. With those savings, and no more work-related expenses for commuting and dry cleaning, you’d probably get away with a lower income.

But if you weren’t saving heavily to the end, it’s hard to see how you’ll reduce expenses 30 percent instantly at retirement unless you’ve paid off the mortgage.

In 2010, the most recent data available from the Federal Reserve Survey of Consumer Finances, 40.5 percent of households nationwide where the head was between 65 and 74 years old were paying a mortgage. But while that’s down slightly from 2007 (42.9 percent), it’s up from 2004 (32.1 percent) and substantially higher than a generation ago.

“It really started to uptick around ’95, and it’s gone pretty much consistently upward since then,” says Craig Copeland, an economist at Employee Benefit Research Institute in Washington, D.C.

Why, then, don’t more people make paying off the mortgage before retirement a priority?

Copeland says a lot of things changed. Housing values went up and credit loosened at a time when many baby boomers were in their 50s. Many families did cash-out refinancings to help pay for kids’ college tuitions, or renovations.

“You see a lot of people in their 50s buying bigger houses, new houses, as their incomes went up,” he says.

Guy Cecala, publisher of Inside Mortgage Financing, said in his parents’ generation, a lot of people planned to pay off their houses before they retired, then sell it, move to a smaller house in a warmer climate, which they would buy with cash and use the rest of the proceeds to live on.

“My parents, they had a house in Connecticut,” he says. “They viewed that as their retirement, their nest egg. You don’t hear people doing that anymore.”

But, as the mortgage numbers show, a majority of people own their houses free and clear by 65 — people like Jim and Sallie Cappadora.

Jim, 63, and Sallie, 60, paid off their Ellington, Conn., house eight years ago. If they had let their 30-year mortgage run its standard course on the house they bought in 1986, they’d have three years left to pay.

“From the very first mortgage payment, we paid an extra $50 a month toward our mortgage, and after five years, we had paid off 10 years of principal,” she says.

In 1986, they sold the first house for $104,000, and bought a $158,000 house, with a $90,000 mortgage.

Sallie stayed home with their kids for eight years, but later, after she started working full time as a real estate agent, she and her husband started putting $100 a month toward the principal.

Then, in 2003, her husband lost his manufacturing job, when they had two kids in college. He had covered the family with benefits, so they had to pay $1,360 a month for insurance.

“Believe me, it wasn’t easy when he was laid off,” she says. Before he lost his job, their annual earnings were roughly equal. He was out of work for several years.

The kids borrowed some of the money it cost to go to University of Connecticut, but Cappadora said she only missed five months of putting extra toward the principal in the 29 years they had a mortgage.

The last years of the mortgage, when it was $800 a month, Cappadora put far more than $100 extra in a month. Some months she would pay $2,200 toward the mortgage.

Over the years, they have done a kitchen remodeling and other interior upgrades, but when asked if they paid for the projects with a home equity loan, she replied, “Oh, no, no, no. It’s always been: If you don’t have the money, then don’t spend it. It’s the same thing with credit cards.”

Copeland says it’s possible someone in his 50s could build assets faster in his 401(k) if he made the right investments than he would putting money toward mortgage principal. But, he said, “Even if you think you’re investing properly, it’s impossible to predict (the outcome).”

He said anyone who has a 401(k) employer match should be putting enough in to get that match.

But once that’s done, he says the wisest thing for a person who’s 55, who has just $30,000 in a 401(k) but also has 17 years left on a mortgage, would be to try to reduce the remaining years. If someone had a $130,000 balance at 55, at 4 percent interest, and paid an extra $175 a month, the mortgage would be paid off in 13 years and three months.

“It’s easier to work two years longer than five years longer,” Copeland says.

Whether the value of the house drops or not, owning a house free and clear has the same value.

“If you can get rid of something that’s 20 percent of your budget, that is enormously beneficial,” he says. “To be able to get rid of that expense is … a key choice they can make that will allow them to have an easier retirement.”

Looking For a Great Investment? Landlords Are Cashing In On High Rent Demand...

If you are looking for a good investment you might consider Real Estate...  The primary reason behind my optimism is because more than 3 million former home owners, who have been displaced by foreclosures or short sales, are turning into renters and because of that occupancy rates are at all time highs...  Face it, people need a place to live and if they have been plaqued with a foreclosure or a short sale it will be years before they will be able to purchase another home unless they pay with cash...

Taking advantage of an increase in home owners-turned-tenants, apartment landlords are raising their rents and expect to continue to do so.

During the first quarter, monthly apartment asking rents increased 2.2 percent year-over-year, reaching an average of $1,070, according to Reis, a property research firm.

Vacancies are at lows and developers are trying to rush projects of multifamily housing to meet the increased demand from renters, but continued constraints on lending has put the brakes on many projects, particularly in smaller markets.

“I’m optimistic about the multifamily sector, certainly for the next two years,” Kevin Thorpe, chief economist at Cassidy Turley, a commercial property brokerage, told Investor’s Business Daily. “We’ve entered a period of sustained rent growth.

The reason behind analysts’ optimism: Young professionals are increasingly turning to renting and more than 3 million former home owners, who have been displaced by foreclosures or short sales, are turning into renters.

Demand for single-family home rentals is increasing too, according to CoreLogic. A four-month supply of single-family homes is now available for rent, which is down from five months a year ago, according to CoreLogic data.

To view the original article, click here: http://realtormag.realtor.org/daily-news/2012/06/12/landlords-cash-in-higher-demand

FHA rehab loans ideal for distressed homes...

Rolling purchase price, fix-up costs into 1 loan is next best thing to new construction

By Steve Bergsman
Inman News®

Foreclosures and short sales always look so enticing, but these kinds of deals are not for the faint-hearted or those on slim resources.

Buying a residence that is not newly built usually requires immediate rehabilitation and remodeling to be followed by regular maintenance. Taking on a foreclosure or short-sale property only ratchets up the process with more intensive rehabbing and certainly a lot more maintenance.

However, one of the most overlooked FHA programs, the 203(k) loan, can help with all those problems if you want to take on the burden of the foreclosure investment.

I bring all this up because I wanted to discuss the 203(k) loan program, which is an underappreciated FHA opportunity that can combine purchase price and fix-up costs into one mortgage, and, secondly, because there have been increasing discussions about the virtues of buying a new home instead of a cheaper property where the mortgage is busted.

I'll address the latter issue first.

Just like the purchase of a new car instead of used one, many prefer to buy a new home because it comes with all the modern bells and whistles and since everything is brand-new; as a homeowner, one shouldn't have to deal with structural and systematic breakdowns.

Recently, the National Association of Home Builders pulled some data from the 2009 (most recent) American Housing Survey, a joint production of the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), to see how frequently maintenance was required in a new home (four years old or younger) versus an older property.

Its conclusions: 26 percent of all homeowners spend $100 or more a month on various upkeep costs; only 11 percent of owners of newly constructed homes spend this amount. In addition, 73 percent of new homeowners spend less than $25 a month on routine maintenance costs.

The same holds true for energy expenses, NAHB reported. On a median-square-foot basis, homeowners spend 78 cents per square foot per year on electricity. Owners of new homes spend 65 cents per square foot per year. For homes with piped gas, homeowners spend on average 53 cents per square foot per year; owners of new homes spend 38 cents per square foot per year.

"The message is, when you compare the average new-home price to the average existing-home price, new homes are more expensive, but when you consider additional, incremental costs, you are getting additional value," said Robert Dietz, an economist at the NAHB. "Obviously, the new home is going to be in superior condition, which means less expenses in the early years."

Although the numbers from the 2009 American Housing Survey are getting a little ripe, Dietz doesn't foresee a big change when the next survey appears. If anything, he said the gap should be wider because homes are much more energy and maintenance efficient; meanwhile, the cost of energy and maintenance has only increased.

"When you hear someone say, 'Hey, I got a short sale and the price is good,' the economist in me would respond, 'There's no free lunch,'" Dietz said. "It is going to require some effort and dollars to bring that home up to the standard the homeowner wants. In new construction, you get that standard in day one."

Still, buyers of short sales and foreclosed homes seem to know what they are doing, and really, really want to purchase existing residences at what they consider bargain prices. They know there will be some fix-up costs, and if they're smart they'll be aware of one of the better FHA programs, the 203(k) loan.

I checked in with Brian Robison, a principal with Summit Design Build LLC, an Atlanta contractor and renovation specialist company, who works the 203(k) loan market in his area.

"A lot of people don't know about this loan; it's really a tight-lipped kind of thing," he said. "Everyone wants to buy foreclosures, but they don't know about the 203(k) loan programs."

That's unfortunate, because it is a great selling point.

Just a few notes from the FHA 203(k) loan website:

--This is the Department of Housing and Urban Development's primary program for the rehabilitation and repair of single-family properties.

--The program operates through FHA-approved lending institutions, which submit applications to have the property appraised and have the buyer's credit approved.

--To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property.

The best feature of this loan is that it can be rolled into the mortgage.

Robison explains: "The reason people should use this loan is because it is a way to not have to come upfront with cash. You bring the home's value up and roll it into your mortgage. It really opens up what's available on the market because if someone is looking at homes and saying, 'I can't buy this one because it is going to take $30,000 to redo the kitchen and put in a new carpet, they can get the expense wrapped up into one loan with one closing."

There is even a streamline version of this loan that can go up to $35,000. Otherwise, the FHA loan limits vary by market, which, according to one website, range from $271,050 to $729,750.

The same website offers this note about qualifying: minimum down payment of 3.5 percent; credit score of 640 or higher; no other FHA loans; and you do not have to be a first-time buyer.

In 2011, Robison said his company did about 14 projects using the 203(k) loan. "They weren't very popular last year. The FHA only closed about 4,000 of these loans across the country," he said.

And for this year?

"It's just now catching on," he said. "Through the first couple of months in 2012, I've already done four. If I stay on this track, I'll probably do 20 to 25 this year."

Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.

Contact Steve Bergsman:
Email	Letter to the Editor

 

Copyright 2012 Inman News

 

Make Any Size Your "Super" Size Whether UPSIZING or DOWNSIZING...

Whether moving across the street or across the country, when there is a change in the size of a living space, there is a lot to think about with many pro's and con's to consider. Finding the right sized space is easier if you consider your lifestyle now and how it might change in this new space. Understanding your reasons, hopes and goals in transitioning to the new sized home is the biggest key to your success. The clearer and better prepared you are to transition to the new sized home, the bigger benefits you will receive in the short term. You can fix your errors over time, but often there are costs associated with that, so getting things "right" in the beginning is worth your time and effort.

Money - value or savings, often top the list for a size change. Often, people downsize thinking that they will save money; some people take equity from their larger home and use that money for other ventures. Upsizing during a buyer's market can get you a good deal on a larger home. Either way, if money is the focus, remember that as you look at the home. Sometimes the savings is not as big as you think, or you can quickly get in over your head. A smaller home in a more desirable location might cost you more than your large home in a less sought-after area.

Lifestyle - changes in family size, job status, retirement or health top the list for lifestyle changes that prompt size changes. While money may still play a role, if your reasons for changing the size of your home are "lifestyle related" then you will want to keep this focus.

Upsizing

Many housing markets are providing buyers with opportunities to "upsize" - getting more house for the money and great values for the housing dollar. Going up in size when you have been living in a small space can be quite appealing, though surprisingly there are some challenges, too.

Pros

• Finally - you have more storage and space to move!
• Additional bathrooms allow more privacy and easier morning routines
• Additional bedrooms ease strain on family members and encourage guests
• Larger kitchens enable cooks to do their job with ease
• Added space can accommodate a home business or hobbies
• Larger homes also often have added amenities like larger lot size, lawns and landscaping in addition to more space inside the home

Cons

• In a larger home there may be more walking, more stairs, and facilities may or may not be as convenient
• Costs of heating and cooling will be higher
• Maintenance costs are often higher
• Property taxes may be higher
• More and possibly larger rooms may require more furniture or the scale of the furniture that you do have is off - so additional decorating expenses will be incurred
• Attics, basements, garages, sheds and storage areas need to be organized, and sometimes heated, cooled, or dehumidified to prevent items stored there from becoming ruined
• Lawns, landscaping and larger lots require care and maintenance which can be costly and a lot of work

Suggestions:

If you are upsizing at the same time that a family or friend is downsizing, you might walk into a great deal on furniture, tools, lawn-mowers or other must-haves for your new home. Check out Craigslist and local garage sales to score great finds and help you to get to know the new neighborhood. Weigh the cost and benefits of moving furniture long distances. Treasured family heirlooms will likely remain on the moving list while less favored items may not be worthy of moving. And, don't forget rentals - there are actually places that can rent furniture while you make up your mind about what you want or can afford.

Do some planning for your new space. Magazines and the internet are filled with ideas that may provide inspiration for you, or consider working with an interior designer. Take photos of the new space and measurements of the rooms so you can better understand the opportunities and constraints of your new home. Consider the condition of the walls and floors, windows and lighting as you go. Painting and work on the floors is much easier to achieve if the room is already empty. For improvements, if you can make decisions on color and materials, and schedule workers, completing improvements prior to moving in can save a lot of time and effort.

If you have never owned a home before, it can be a big task to take on a large space. Often your realtor will know of reliable professionals to help accomplish home improvements. Your excitement and enthusiasm will take you far, and remember: you don't have to do it all at once. Create a prioritized list for the new space, knowing you still have your day-to-day life to live while getting settled in your new home.

Downsizing

Sometimes a desirable location translates to a smaller home, or perhaps you are consciously choosing to reduce your space. Whatever the case, if you are moving from a larger home to a smaller one, chances are "stuff issues" will top your list. Knowing this when you are looking may be useful for you to see how much you can fit into the new space and what you need to part with. For some people, this is an emotional time. Falling in love with the new space can be a key to success. Your realtor can help you to find the right small space for you, only you can find the right space for your stuff.

Pros

• Finally - you are not paying to heat and/or cool rooms that you rarely use!
• It is convenient to have rooms closer together - often there is less walking
• There is less to clean and to organize
• Maintenance chores are often less, with smaller rooms, fewer windows, floors, less roof, etc.
• Perhaps you are seeing a reduction in property tax or mortgage
• Often you have less to take care of in the way of property and landscaping

Cons

• Often you have to make some tough decisions regarding "stuff"
• Your furniture might be "off" in scale, better suited to a larger home
• Fewer bedrooms and/or bathrooms sometimes require planning for family and guests
• Cooking in a smaller kitchen is different, and storage for kitchen tools and food might require thought

Suggestions:

Enlist the help of a professional. Recent trends in lifestyle management have spawned personal and professional coaches, as well as professionals who help with organization and clutter management. These professional organizers make it their business to know the best way to clear your closets, storage areas and generally handle and manage your stuff.

If you feel overwhelmed and can afford their help, they might even save you money in the end by reducing the need to rent storage, saving you from moving unneeded items, and helping you sell some of the more valuable things. And, while they are not interior designers, professional organizers have seen a lot of homes and know the most attractive ideas for using your space. If you are trying to sell a larger home while planning for the move to your smaller space, professional organizers can also aid you and your realtor in staging the home you are selling, gaining you twice the return on their services!

When downsizing, consider the features of the home that you use the most. Will you be doing the same things in the new home, or is there going to be a lifestyle change, too? Ensure that you compare what you are currently doing in each of these areas, and how that will have to change in the new space.

In the kitchen: If you are currently using many different kitchen tools, but moving into a home with a smaller kitchen - will you need to get rid of tools? Or will you find or create storage space in the new kitchen? Perhaps you are moving to a place with great restaurants - but can you afford to eat out a lot? Often you will need to plan for less pantry space, too.

In bathrooms: You will often be faced with towel and linen storage designed for a smaller dwelling, and vanities that are in keeping with smaller spaces. This can translate into crowded medicine cabinets and stuffed drawers, so even everyday things like personal care products become "stuff issues." Consider buying smaller containers and filling them from larger bottles - your small space doesn't have to be crowded if you can plan and get creative. Keep only the best of your towels and linens, and that which you really need.

Changing the size of your space may or may not benefit you financially, but the change in lifestyle will not be missed. It is an opportunity to re-evaluate your belongings and your relationship with the space you have and use. Sometimes, it even means looking at the way you do things, and why. Changing the size of your space is essentially an opportunity to get to know yourself all over again, in a very conscious way. Tackling these challenges and viewing them as opportunities will result in a new home that is suited to you and your needs. Bigger or smaller, be sure you make it just like you want it.