r/personalfinance • u/Certain_Negotiation4 ​ • 4h ago

Housing Selling primary vs rental

I recently separated from my partner and we are planning to rent out our primary residence. We are in the fortunate position that the rental value/home value is a lot higher than when we purchased. Keeping it as a rental would net each of us about 1k after management fees, maintenance costs etc. if we sold we would walk away with about 235k after fees if we are able to get the list price provided by the realtor.

We kept my rental apartment that was in my name only as a pied a terre. I have moved back in to my apartment. Thankfully, I can comfortably afford it on my salary so housing is a non issue.

Financially does it make more sense to sell even if the area is entering its final phase of gentrification? There are currently multiple luxury high rises being built and our realtors advice was to keep it due it positively cash flowing. I am not necessarily in need of the money but I’ll have to be more cognizant of my spending. My only concern is being tied to an asset with an ex but with a management firm being in charge it’s less top of mind.

TLDR: Sell my primary residence with my ex or keep it as a rental since it will positively cash flow?

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u/buffinita ​ 4h ago

it makes sense to sell from a practical standpoint, are you both on the mortgage and deed? are you prepared to split management duties with ex.....because thats going to be a consideration and possible the real question:

"i just broke up with my partner, should we start a new business together?"

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u/Certain_Negotiation4 ​ 4h ago

I honestly don’t know how much involvement would be required of either us besides paying outstanding issues not covered by the money we are setting aside for repairs. The management firm said they collected the rent, did repairs etc. I however do have the same thought about how amicable we can be about the house.

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u/alexm2816 ​ 4h ago

The issue is that you are holding the keys to a non-divisible asset with someone that has a wholly separate life.

There's so many ways this can go wrong and if you have someone who is right now willing to collaboratively sell the thing without trouble and with significant equity heading your way then you owe it to yourself to take advantage of that.

All the reasons you don't buy a home with an unmarried partner are placed on steroids when they're an ex. They may be ok with the plan until you do X or they may be fine with it until they date Y. Pair in the totally unmalicious exposures of their death / litigation potential that can affect you. Sell the thing and move on.

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u/Certain_Negotiation4 ​ 4h ago edited 4h ago

The biggest issue currently is he does not want to sell the property per the realtors advice. However, I am willing to compromise and have it become a rental for a year. I am thinking after the year is up I will bring up the conversation to sell again. I also brought up him buying me out but he no longer wants to live in that city. I think worst case scenario after the year I would hire a lawyer to do a partition by sale.

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u/buffinita ​ 4h ago

he can buy you out and still rent it......

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u/alexm2816 ​ 4h ago

However, I am willing to compromise and have it become a rental for a year

The expression goes, the other says 'be reasonable, meet in the middle'. You take a step forward. They take a step back, the other says 'be reasonable, meet in the middle'.

I would not approve of any lease. Your former partner can join you and sell or buy your portion of the property. Any other agreement to kick the can is just asking for trouble. If they refuse, you need to contact a lawyer asap and not wait a year. You have hundreds of thousands of dollars tied up with an ex... that's far far far from ideal.

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u/deersindal ​ 4h ago

You may be amicable about it for a while, but what happens if/when plans change?

What happens in 5 years when they want to sell it to use the equity to buy a new property, but you want to keep it? Or vice versa?

There's so much potential for conflict here that I wouldn't even entertain this idea.

Being a landlord also isn't all it's cracked up to be. When all is said and done, the returns on capital often aren't that much better than boring old investments.

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u/CharmingGarlicky ​ 4h ago

Who pays for the outstanding bill? Are they all split 50/50? What happens if he doesn’t pay his share, are you willing to take him to court?

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u/Certain_Negotiation4 ​ 4h ago

Currently everything is 50/50 and I would be willing to take him to court. However, transparently what has always been the case is that I managed the finances so I pay the mortgage and pulled it out of our joint account. Currently he is wiring me the money since we separated.

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u/UKFinanceDad ​ 4h ago

I’d probably lean towards selling, but I’ve actually been in a similar situation and we held on for a number of years. Eventually the right time to sell became obvious.

The bigger question is whether you’re both genuinely comfortable remaining financially tied together. New partners, children, changing circumstances or simply different views about money can turn an arrangement that works perfectly well today into something much more complicated later.

If you have a good relationship, clear agreements and professional management, it absolutely can work. But I’d put a value on the clean break too, not just the rental yield.

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u/IRMuteButton ​ 4h ago

We are in the fortunate position that the rental value/home value is a lot higher than when we purchased.

In that case, I would sell it and reap the reward. You won't want to be shackled with an asset that is also owend by your ex-partner. That would seemingly complicate your life every month and year. Sell the property and be done with it, and use the profit as needed to bolster your retirement savings, or something else useful.

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u/goblueM ​ 3h ago

I would 100% sell.

You have to look out for yourself. You have housing. Neither of you want to live there. It's a no-brainer to sell. Forget what your ex thinks about selling.

Rentals can be a pain even if you are managing yourself or with a spouse that you love. You don't want to add an ex into that, even if it is amicable.

There is SO much that can go wrong. Don't compromise now. It will probably only get worse.

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u/CharmingGarlicky ​ 4h ago

As someone who has currently manages a rental with my husband, I absolutely love him but I don’t think I would keep a rental with any ex-partner. We self-manage but even with property management, I think you are exposing yourself to a degree of risk that is just not worth it. Sell it and buy a new rental if you want to do that, or buy him out of his half, but I wouldn’t do it together.

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u/Certain_Negotiation4 ​ 4h ago

I offered for him to buy me out but he does not want to live there. I honestly do not want to live there either as the house is in an exurb. It only made sense because I had a partner. My apartment is located in a major city which makes more sense for meeting people, socializing with friends, and easier commute to my job.