[USER]

I got divorced 2 years ago and I stayed in the house.
The plan was for me to stay in the house till my daughter graduates from HS. She’s a freshman now so I still have 3 more years.

My ex is on the mortgage, but I pay for everything now, and we agreeed he will not be getting 50% from the house.

I can afford the house but it’s not easy, especially because I discovered FIRE and realized I’m behind with my retirement savings.

I could rent an apartment and my monthly payments would be about $800-$1000 less. This way I could save about 10k per year.

But each year I stay in the house longer, my share from the sell of the house goes up by 3%, which would be about 12k more for me per year.

So the overall cost of staying in the house vs renting an apartment would be about the same.

But if I sell the house, I could invest the profits. I have the feeling the home prices in my area might go down bc many of my neighbors are government employees and some of them might be losing their jobs soon.

There’s the cost of maintenance and I never know what else will break. And there’s the emotional aspect, because this is my children’s home.

What other financial aspects should I take into consideration when making this decision?

Thank you for your help!

[Sarah]

Assuming your original goal hasn’t changed (maintaining stability for your daughter), you should stay in the house. Real estate rarely goes down in value.

And living in an apartment with a teenager isn’t a great quality of life.

I’d stay if it were me.

[Ashley]

I agree that an apartment might be a smart move. Utilities will also be less expensive. There are no guarantees of appreciation if you stay in your current home and repairs can get costly quickly – especially in a large house.

And if you don’t have enough in retirement you can’t afford the large house.

[Melissa]

Not every decision in life is purely financial. I would stay there for the kids as planned. Reevaluate every year then decide.

Don’t rush to move to an apartment.

[Cynthia]

When I divorced, I stayed locally and bought the smallest, cheapest house I could find in the next village so that my kids could finish high school with their friends. I’m so glad I did.

Now they are away at Uni (or finished), but each has a key to the house.

It’s their home base to come back to and see their friends. And for me, it’s the same (I work-from-anywhere).

It’s so much less pressure than the big house we left that was costly to run.

[Linn]

I would stay in the house, quality of life is a huge issue, especially for a girl in high school, the stability of being in her home for me would be priceless.

If it means you have to work another year or two at the end before retirement so, be it.

In my opinion

[Kathleen]

What about renting out a room in the house to increase the amount you can invest.

[Sarah]

I have heard too many divorcee’s try to hold onto house for kids like it’s a lifeline and can’t afford it, they bought on two incomes.

Don’t make a decision based upon emotions, whether that is from divorce or political or housing market “feelings”.

We have always put together a spreadsheet and included pros and cons to staying versus moving or between houses. Give the reason a value and rank its importance.

At the end of the spreadsheet value you come up with will tell you. We would put in the cost, rent, home owners insurance versus renters insurance, gas if one location is further away even the features that were important.

Kids are resilient, teenagers care more about how you interact with them and the relationship that you have. House or apartment doesn’t matter, making it a home does.

The market could go up, could Go down. We owned a home from 2006-2016. Bought high, sold low.

Our area did not recover from housing crash in 10 years like most of the country did.

A house is supposed to be a good investment, sometimes renting can be better. You won’t know until later.

[Cee]

Living in an apartment with kids is absolutely awful! Keep the house until your child graduates. Then downgrade to an apartment when it’s just you.

I say this as an apartment dweller myself.

[Brian]

Don’t forget the cost to actually sell and buy a house. Those commissions can eat up a good bit.

And then the moving, storage, cleaning, staging, etc…

[Ellie]

I finally sold my house, in which I eked by as a single mom, when my youngest graduated last spring. No regrets from either of us!

It has accelerated my FI journey TREMENDOUSLY, and tbh I was surprised by how little sentimentality the kids had about their childhood home – those feelings were more mine.

We did a family “house cooling” party where we walked the house and reminisced.

This isn’t the exact answer to your question – great points made by other ChooseFI’ers here, but I thought I’d share experience from the other side.

[Tony]

What does ‘we agreed he will not be getting 50% from the house’ mean? In lieu of 50%, what is the arrangement?

A set amount established in writing at the time of the divorce based on an appraisal on the divorce date?

There’s the potential opportunity cost of not investing your money from the proceeds of the house if you stick with ownership (it would likely grow faster than the accruing equity).

The opposite of that is that rent increases roughly 3-4% a year, so it’s only a matter of time before rent surpasses your monthly housing expenses.

You are also moving into a less stable housing situation during a housing shortage – what happens if your landlord decides to not renew a lease or sell the place you just moved into to a new landlord who will increase rent?

The financial value of a home is maximized when at full occupancy, so there’s also the possibility of renting out an extra BR to a medical or exchange student to offset a portion of the mortgage (as well as some tax write-offs that come with renting).

You could also have the best of both worlds by moving into a rental while renting out your house to keep banking that equity (assuming the prevailing rent is greater than your current mortgage and house expenses).

[Author]

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