Author Topic: Sell house or invest more into it  (Read 456 times)

jjcamembert

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Sell house or invest more into it
« on: April 08, 2019, 03:35:49 PM »
Unfortunately I am getting divorced and need to determine whether or not it's a good idea to try to keep the house post-divorce. I will likely need to pay maintenance as well so my monthly income is going to be extremely tight for a few years as well.

We currently own a 2BR townhome 10 miles from my work in a good (and high-demand) neighborhood. I wouldn't mind staying here but with an equity payout to my spouse I am trying to make the best long-term financial decision.
If I can rent the other bedroom (likely), the current monthly payments (everything included) are less than renting a 1BR apartment.
The apartment could be closer to work though, so less/no driving required if I did that.
Renting a room in a shared house would be cheaper still by about half.

   A. I could offer equity from my retirement accounts, but that would set me back big-time in my retirement savings; essentially starting over (I'm mid-30s). My entire NW would be in the house.

   B. I could get an additional loan on the house, but that would be an additional payment which I can't afford while paying maintenance (it would end up coming out of my savings anyway until
       the end of maintenance payments). Refinancing is an option too but getting the additional loan is less expensive overall.

   C. We could sell the house and both walk away with no loans and a good chunk of change for a down payment later on. I would probably rent a room in a shared house then to minimize expenses.


I am personally leaning toward C right now, but also know I'm risk averse to real-estate especially after the big run up it's had in my area, and bearish on the economy in general (market timing, I know). The additional downside of C is having to sell all of the items acquired for the house (furniture, dishes, appliances).

So outside of completely wrecking any thoughts I had of FIRE, what is my best move here? Keep the house and lose most of my other investments (house poor)?
Sell the house and have extra cash for a future down payment and FIRE? Something else?

Thanks!

spartana

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Re: Sell house or invest more into it
« Reply #1 on: April 08, 2019, 03:50:33 PM »
I would choose option C myself if you don't have kids or any reason to stay where you are now. Split the equity and look for a room to rent or a shared apt close to your job and save for something that might suit you better financially and socially (might meet someone with his own place or you might get a job in a different location etc) in the future.

 A 4th option, the one ex-dh and I choose when we had a very friendly amicable divorce, was to buy your dh out but make payments to him over time. My dh was relocating out of state and we had several new very young pets and I was close to my job, friends and family so I wanted to keep the house. We wrote up a low interest loan agreement and I paid him over time (4 years) as well as carried the mortgage and other house expenses. It was tough but I got 2 roommates and that helped a lot.

Tyson

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Re: Sell house or invest more into it
« Reply #2 on: April 08, 2019, 07:47:10 PM »
I'd do C and move closer to work.  If/when you meet your next wife, then maybe look to buy again, using combined income. 

Having that extra cash cushion will be nice, especially during the time you have to pay maintenance.

soccerluvof4

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Re: Sell house or invest more into it
« Reply #3 on: April 09, 2019, 06:56:01 AM »
I would do C as well. Just move on from it all.