The Crux of the Problem
Property division can produce all sorts of different outcomes. As readers may know, Texas is a community property state, which means that marital property is divided equitably between spouses in most cases. If a couple buys a house together after the marriage, that house will be classified as marital property in a divorce. Often, judges will order a house to be sold after divorce to ensure an equitable property division. In other cases, however, judges will assign a marital house to one spouse, provided that the other spouse receives enough to balance out this assignment.
In many cases, the spouse receiving the marital house is quite happy about the assignment. But, what many people don’t realize is that a house can bring about a whole set of financial obligations. An expensive house can create financial difficulties for an unprepared spouse. Here are a few tips spouses can use if they acquire an expensive house after divorce.
Rent Out a Room
Often, a marital home is acquired specifically because it provides adequate space for both spouses. If one spouse acquires the home in full after divorce, then this may mean there is quite a bit of excess space. Rather than simply allowing space to remain underutilized, rent out one of the extra rooms, or extra floors, in order to offset housing costs. Housing costs can quickly become overwhelming due to property taxes, insurance, utilities, etc. Renting out a room or floor can be an excellent financial strategy.
Convert to Rental Property
Another possible strategy is to convert the entire house into a rental property. If the house is expensive to manage, that also means it may be lucrative as a rental property. Of course, this involves some up-front costs, such as marketing and tenant acquisition, as well as an outside residence in which to live permanently. There are also tax implications that you will need to discuss with an accountant. But, if you are able to procure a tenant (or tenants), those costs can easily be offset, and then you can even generate a profit. Keep in mind, however, that being a landlord comes with plenty of responsibility, as you’ll be expected to fix certain appliances and handle certain complaints.
Yet another possible strategy is to find ways to increase your income. A larger income will give you greater ability to comfortably manage the various fiscal matters associated with owning an expensive house. Of course, increasing income is much easier planned than achieved; but, for those who can increase their income, this is certainly a solid option.
Sell the House
Finally, for those who believe that the burden of owning an expensive home will ultimately outweigh the benefits, selling the house might be a good option. Selling the house should only happen after a careful analysis of the situation. You need to consider all the variables involved: the current real estate market, the projected future real estate market, current value, your current financial situation, and so forth. Remember, real estate can be a great long term investment, and so selling in the short term might be unwise in some cases. Again, you need to conduct a thorough analysis of your situation to plot the best course of action.
Contact Divorce Concierge for More Information
Dealing with an expensive house after divorce can be one of those unexpected problems which gives spouses quite a bit of headache. Spouses are often thrilled to be finished with their divorce, and then receive a rude surprise when they consider the financial obligations associated with an expensive home. If you’d like to learn more, contact Divorce Concierge today by calling 469-659-8880.