According to the CDC, there were roughly 2.5 divorces in Connecticut for every 1,000 people in 2021. Divorces are always challenging, both emotionally and financially. When you are dealing with high assets, the complexity can increase exponentially.
Among the many assets that need division, real estate, especially investment properties, often becomes a focal point of discussions. The decision to keep or let go of these properties can be daunting. But how do you decide if hanging onto such assets is in your best interest?
Retaining investment properties can be lucrative in the long run, especially if they generate a regular rental income or are in an area where property values are appreciating. You must evaluate if the income from these properties can support your post-divorce financial goals and lifestyle. On the flip side, holding onto properties also means bearing the expenses related to maintenance, taxes and potential vacancies.
Property’s emotional value
While financial implications are important, it is equally important to consider the emotional ties you have to the property. Some investment properties, like vacation homes, might hold significant sentimental value. If the property brings back memories you would rather not revisit, it might be better to part with it.
The real estate market in Connecticut can be unpredictable. If the market is currently in a downturn, it might be worth holding onto the property until it picks up, so you get a better value. Conversely, if the market is booming, selling might fetch you a good price that you can invest elsewhere.
Owning investment properties means you also have to manage them. From dealing with tenants and upkeep to handling potential disputes, property management can be time-consuming. If you are not up for this responsibility, consider whether retaining the property is worth the potential stress.
Future financial goals
Post-divorce, your financial landscape will change. Reflect on your future financial goals. Do you see this property fitting into that vision? If you aim to simplify your finances or want to pursue other investment avenues, selling might be the better choice.
While there is no one-size-fits-all answer regarding whether or not to keep an investment property, taking the time to thoroughly evaluate your unique situation will guide you to a decision that aligns with your financial and emotional well-being. Remember, whatever you choose, ensure it supports the fresh start you seek post-divorce.