Many men and women are experiencing divorce at a later age and grappling with the reality of splitting assets, including selling the family home and the litany of complications that result. What is often lacking once the family home has been sold, and funds have been divided, is guidance re buying their next home and providing security for themselves and their family into the future. Miriam Sandkuhler from Property Mavens shares her tips on how to re-establish yourself after divorce.
So what does a divorcee do when their budget no longer enables them to live in the type of property or suburb to which they and their children have become accustomed?
How do they reconcile their own needs with those of their children’s and accommodate everyone, taking into consideration their new budget and timeframes?
We have found that men and women take a very different approach to finding a new home and this can be fraught with danger if current and future needs are not carefully considered.
Here are some points to carefully consider when re-establishing yourself;
1 Firstly, look after yourself financially ahead of your children. There is no point trying to help them out financially in time to come if you can’t support yourself into retirement or feed yourself. And don’t assume they will look after you in return. I have seen this go sour quickly and sometimes because an adult child’s (future) spouse has a say in this arrangement. And a lot of the time they say no!
2 Next steps depend on how old your children are, if they go to school locally and how many years they are likely to continue to live at home with you.
If you need to stay local/close by and kids are with you for at least another 5+ years, then it’s worth renting what you need locally and considering investing your available funds into a high performing capital growth investment property. You must ensure you buy the right (established) property, in the right suburb with the right attributes to grow above market value. This is often called ’rentvesting’.
This approach allows your family to remain in the area within your means, while ensuring your money is working hard for you. While it’s not the same as potentially buying a compromised home in the same or nearby location using limited funds, it provides some stability and possibly better family quality of life.
This is where an investment specialist buyer’s agent can assist with strategy, sourcing and negotiation. Don’t be afraid to engage a licensed professional as they are there to help take the emotion out of the process to ensure a good outcome.
What this means is that you have money in the property market, which could rise in value until your kids leave home, allowing you to reassess your situation then.
3 At the stage where kids have moved out, you may move suburb or state and you may be happy with a smaller property that requires less maintenance and is more affordable. You may be single or re-coupled and as this is a new phase in your life, you can weigh things up, utilising the value of your investment property to help pave the way into your new lifestyle or home.
By becoming aware of the factors that need to be considered and the external issues which can influence and detract from your decision making process, you can take considered steps to ensure you create stability and financial security for yourself and your family now and into the future.
Miriam Sandkuhler is an author and CEO of Property Mavens, an independent boutique buyer’s agency based in Melbourne. propertymavens.com.au