Going through a divorce is challenging, both emotionally and financially. Among the myriad decisions you have to make, one of the most significant is what to do with shared assets.
In Colorado, if you and your spouse own investment properties, you face an added layer of complexity. Here are some considerations to help you determine whether you should retain these assets or let them go.
Understand Colorado’s property division rules
Colorado follows equitable distribution rules when it comes to dividing assets in a divorce. This means that the court divides property in a manner it deems fair, which might not mean an actual 50/50 split. When you think about your investment properties, consider how the court might view their division and what feels right for your situation.
Evaluate the property’s financial performance
Before deciding to keep or let go of an investment property, take a close look at its financial performance. Does the property generate a steady income? Are there outstanding debts or mortgages? Analyzing the cash flow and potential future value can guide your decision.
Consider the emotional ties
Even though investment properties are, by nature, business ventures, you might have emotional attachments to them. Perhaps you and your spouse bought a rental property in a favorite vacation spot, or maybe you invested in a fixer-upper and spent weekends renovating it together. Think about whether you can separate those emotions from the financial aspects. If a property brings back too many memories, it might be healthier to part with it.
Think about management responsibilities
Owning and managing an investment property takes time and effort. From handling tenant concerns to addressing maintenance issues, think about whether you have the capacity to manage the property on your own.
When it comes to your overall financial health post-divorce, consider how the investment properties fit into your plan. Determine whether they will help you achieve financial stability and growth or become burdens that drain your resources.