Published June 17, 2026

A Real Estate Guide to Downsizing

Written by Owen & Camille Schwaegerle

A Real Estate Guide to Downsizing header image.

The Schwaegerle Real Estate Team

Downsizing on the Central Coast

5 Strategies for Making Your Next Move

For many homeowners, downsizing isn't just about moving into a smaller home. It's about simplifying life, reducing maintenance, improving cash flow, getting closer to family, or finding a home that better fits your next chapter.

If you've owned your home for many years, you may also be sitting on significant equity which creates opportunities that weren't available when you first purchased.

We hear the same question all the time: "What's the best way to downsize?"

The answer depends on your finances, goals, timeline, and comfort level. Here are the five most common strategies we help Central Coast homeowners evaluate.

Strategy 1

Buy First, Then Sell

This is often the most convenient option for homeowners who can financially qualify for both properties simultaneously. You purchase your next home first, move on your own timeline, and then list your current property after you've settled in.

Benefits

No temporary housing or double moves
Shop without pressure or rushed decisions
Easier logistics and move coordination

To Consider

Must qualify for both homes
May carry two mortgage payments temporarily
Additional reserves typically required

Strategy 2

Buy First and Keep Your Home as a Rental

This is one of our favorite strategies. As real estate investors ourselves, we believe strongly in the power of long-term ownership — especially for homeowners with low interest rates they may never see again.

Rather than selling, you purchase your next home and convert your current property into a long-term rental. Many homeowners use a HELOC to access equity for the down payment without selling at all.

Benefits

Keep a valuable appreciating asset
Rental income + continued equity growth
Diversified retirement income
Potential tax advantages (ask your CPA)

To Consider

Must qualify for both properties
Being a landlord isn't for everyone
Property management may be needed

Strategy 3

Sell and Buy Simultaneously

The traditional approach: your sale and purchase are coordinated to close around the same time, often with each transaction contingent on the other. Many homeowners move this way successfully, though it requires everything to line up on a tight timeline.

Benefits

Access equity immediately
One coordinated transition
No double carrying costs

To Consider

Two major transactions at once
Higher stress, tighter timelines
Potentially weaker negotiating position

Strategy 4

Sell First with a Rent-Back Agreement

A rent-back lets you sell your home while remaining in the property for a negotiated period after closing. This approach has become increasingly popular because it gives you certainty, cash proceeds already in the bank, while still giving you time to find the right next home without rushing.

Benefits

Know exactly how much equity you have
Stronger buying position for next home
More time to shop without pressure

To Consider

Rent-back periods are temporary
Still need a plan for your next home
Competitive markets may limit flexibility

Strategy 5

Sell First, Then Buy with Temporary Housing

This approach offers the highest level of financial certainty. You sell, move to temporary housing, and shop for your next home as a non-contingent buyer with cash in hand. Less convenient, but often the strongest negotiating position available.

Benefits

Maximum negotiating power as a buyer
No contingent offers needed
No pressure to settle for the wrong home

To Consider

Moving twice
Temporary housing and storage costs

What Central Coast Homeowners Are Actually Looking For

One of the most interesting patterns we see is that homeowners aren't necessarily looking for the smallest home possible. Research consistently shows that many people prioritize lifestyle, convenience, proximity to family, and lower maintenance over simply reducing square footage.

What we hear most often from clients throughout SLO County:

Single-level living
Less yard work and maintenance
Better accessibility
Proximity to family

Walkable neighborhoods
Lock-and-leave convenience
Active lifestyle communities
Room for family visits

Proposition 19: A Game Changer for California Homeowners

One of the biggest reasons many California homeowners are reconsidering a move is Proposition 19. Prior to Prop 19, moving often meant dramatically higher property taxes so many people simply stayed put.

Today, homeowners who are age 55 or older, severely disabled, or victims of certain natural disasters may transfer their Proposition 13 property tax basis to another primary residence anywhere in California. Eligible homeowners can generally use this benefit up to three times.

For many longtime Central Coast homeowners, this can mean thousands of dollars in annual tax savings while still moving into a home that better fits your life today. We always recommend consulting your tax professional about your specific circumstances.

Free Resource

Ready to Plan Your Next Move?

We put together a free guide walking through each of these strategies in detail, including a checklist to help you figure out which path fits your situation best.

Download the Free Ebook

No strings attached. Just a resource we think you'll find useful.

The Schwaegerle Real Estate Team

San Luis Obispo County • California's Central Coast • DRE #02174659

schwaegerleteam.com