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The true cost of keeping your home after divorce

23 June 2017

Even if you've received a lump sum payment through your divorce, it probably won't be enough to pay the mortgage and keep food on the table. Those previously shared maintenance expenses will now fall on you, just one of many responsibilities you will be dealing with from now on.

And it's not just now that the decision to move will save you - it's going to help your retirement too. Why? Because if you're working, you can sell up now, rent and re-invest your money elsewhere. You'll be making a commitment to growing your wealth in a way that won't happen otherwise.

It may seem like a strange strategy - sell, rent, invest elsewhere - but this is what will get you back on your feet. Imagine where you're living now and how it suits your lifestyle. You probably bought into it on two incomes, but now you're down to one it's simply unaffordable.

So you're going to take your money and buy a property in a more affordable area. You will now have a tenant paying for rent, plus you'll receive tax deductions back in your pay packet via a tax variation. You'll also be eligible for depreciation and other expenses.

While your investment property is being paid for by your tenants and tax deductions, for every year you hold on to it, your property will grow in value. These 3Ts - tenant, taxation and time - will set you back on your feet again post divorce.

Meanwhile, you get to live where you want to, which often means being able to keep the same job, local networks, friends and your children can stay in the same schools.

If you make the right decisions now and you've got 10-20 years left to work, you will end up with between 3-5 properties in your portfolio. The risk of not following this strategy post divorce is that you'll end up with all your eggs in one basket when it comes to retirement, a problem many Australian women are vulnerable to as outlined in this recent article. It's essential to be able to provide for yourself at that stage of life, because we're all living longer than ever before.

If you make the right choices now your retirement will be something to look forward to. Contact me now for your tailored property portfolio strategy on 1300 736 754.

Until next time,