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Moving Overseas - To sell or rent out my house?

Discussion in 'Teaching abroad' started by Newstein, Jun 4, 2019.

  1. Newstein

    Newstein New commenter

    If my contract with the overseas company (school) is for two years, and I am of retiring age, which is the better option?
    My house in London is too big anyway for two people. Suppose the equity is £500K, what would you have done in my situation? Sell up and invest the money or rent for 2 years, and decide later? Are property prices going up at a faster rate than the interest on money that is invested? Help!
  2. Lara mfl 05

    Lara mfl 05 Star commenter

    Would definitely not sell up and invest the money. Sadly there's no investment which would bring in good returns these days.

    As to the possibility of downsizing, because the house is too large, much depends on how quickly houses are moving in your area and whether they are selling 'at silly prices' or not. You probably wouldn't have a great deal of time to get all the paperwork for that done anyway.

    Renting can be good, or bad. Again much depends on how easy it is to find tenants and how many 'gaps' you might have. You'd definitely need an agent to manage things this side for you. I had friends who rented out their house whilst abroad, only to find it wrecked and uninhabitable on their return. :eek:

    If you're in reecipt of a pension remember you'd need to keep accurate records and submit a Self-Assessment form to HMRC and pay tax on the income.
    Newstein likes this.
  3. docHolliday

    docHolliday New commenter

    You are in a good position with a property in London. Find a good letting agent who will manage both the property and the tenants. Some of the income generated will be reinvested into repairs and upgrades but some will go into your pocket and the value of the property should increase. You can always sell at a later date. Meanwhile enjoy the overseas experience.
    Newstein likes this.
  4. 576

    576 Established commenter

    2 words of caution concerning selling.
    I heard of someone who sold her house before leaving for her first overseas job. She apparently hated the UK and was never going to return.
    The day after the December pay check she did a midnight flit.
    I had neighbors in the UK who owned a house, they sold it and went to South Africa. I don't know how long they were there but when they came back they were forced to rent as their money wasn't enough to get them back on the property ladder (and this was on Tyneside where property is affordable).
    Newstein likes this.
  5. ash719

    ash719 New commenter

    My personal opinion is not to sell unless you have to. Get quotes from a few good letting agents and see what yield you can get. Investments can be risk and if they are not then chances are they will earn less than your rental yield. Also, you might change your mind after you have been away for a year or two.
    Newstein likes this.
  6. taiyah

    taiyah Occasional commenter

    To add to 576's above comment.

    Let's not forget your age. Health can, may or will play a part. It's always a great option to have both your home country's health care system and your new settlement's.

    There is a good % of expat teachers who buy or keep a property in their home country.

    Get yourself a reputable agent and solid home insurance. Let the property work for you.
    Newstein likes this.
  7. the hippo

    the hippo Lead commenter Community helper

    Get a good letting agent. Enjoy your new overseas lifestyle and find an accountant who can sort out the tax.

    As regular readers of the pachyderm's online ramblings will know well, this overweight and smelly African beast is in the habit of waffling on about a certain country in SE Europe. But that does not make me blind to the advantages of renting out a property in the UK.

    If you were to sell up and put the cash in a building society, what would you get? 2%? Maybe 3%?
  8. Lara mfl 05

    Lara mfl 05 Star commenter

    You'd be fortunate to even get 1% as rates have been below 0.5 % for many years.
  9. crinauk

    crinauk New commenter

    My story of woe means I would never recommend renting. I had a great tenant, with great references, a great well paid job and seemed a perfect fir. She paid her rent for the first 10 months no problem and then stopped. It cost me all of my savings and salary for almost a year to get her out of my house and keep the mortgage company paid along with loans etc. The whole experience was awful, she was abusive and told so many lies in court but I could not retaliate in any way or else it would be deemed harassment. When she was finally out and I could get back into my home the devastation was heart breaking. She had completely wrecked the interior - holes through the walls and ceilings, dog faeces ground into the carpet (she didn't have a dog) and that was just the start. I ended up having to sell my home at a reduced price because i couldn't afford to repair the damage and I was just getting into further debt. I know many people rent with no problems but I would never risk it.
    hitherejen likes this.
  10. james_1979

    james_1979 New commenter

    Unfortunate story but what kind of lemon home and landlord insurance did you get?

    At minimum home and landlord insurance should include 12 month rental loss, legal fees upto £250k, liability for £5m, all the jazz including terrorism acts. And an option that pays for debt collectors to chase what the Tennant owe.
  11. the hippo

    the hippo Lead commenter Community helper

    crinauk, how absolutely awful! A good agent should have sorted this out for you.
    Lara mfl 05 likes this.
  12. percy topliss

    percy topliss Established commenter

    Years ago when I first came to Thailand I met a thrifty Yorkshire teacher who didn't have time for agents, suffice to say that the same things happened as did to crinauk. She was absolutely ruined by the court costs and the fact that she had to pay loads to get the flat, which had ended up trashed, done out. We now own two houses in the UK, both of which are let out and bring in both an income and, hopefully, are an investment for later on. Both are run by the same agents, who inspect them periodically and deliver to us reports about the status of the properties.

    To the OP, if you are only going away for 2 years I would certainly let out the property, through an agent. The money that you get will be savings and if you are only away for such a short time you will still be eligible for NHS care and should be able to come home having enriched your life, by living abroad and your wallet, by letting out the house.

    As an aside, in 12 years our houses have been empty for a total of about 4 weeks.

    Good luck,

    Newstein and Lara mfl 05 like this.
  13. Lara mfl 05

    Lara mfl 05 Star commenter

    Just to say that in the 6 + years when I rented out my mother's house to help pay for her NH fees I didn't have a single gap. However since she died 18 months ago and I have taken over the house I've now had 2 gaps each over couple of months each . When I was discussing this with the agent we reckoned the recent 6 months minimum let policy has had an effect in that if people move and find the place unsuitable and want to move they're locked into the minimum period and so generally less people are looking.
    That may be a temporary blip, but was why I'd mentioned the possibility of 'vacant periods..
  14. Sharpie123

    Sharpie123 New commenter

    We did 5 years teaching abroad years ago and rented out our house. We actually left the UK with eight weeks notice and managed to store our personal possessions in the loft, get an agent and sort it all. We even moved when we were abroad ~ we had some money, decided to sell, bought via estate agent’s details and moved lock, stock and barrel.

    It was the best thing we ever did. Friends who sold got locked out of the market by price rises and literally took years to get back on par ~ if ever. We didn’t make money ~ we had to pay about one mortgage payment in three. The rent covered two out of three. By the time we paid the agent’s fees, income tax which I think the agent retained ( it was a while ago), repairs, clean ups after tenants, gardening etc, there were a lot of on going costs. But we came back to a home, five years off our mortgage and a substantial price rise. Don’t sell!
    Lara mfl 05 likes this.
  15. the hippo

    the hippo Lead commenter Community helper

    Definitely, definitely DO NOT SELL.

    As regular readers of the pachyderm's online ramblings will know well, this smelly old hippo used to own an apartment in Salisbury. Through an agent, I was letting it out to a young lady who was between boyfriends. Ex-boyfriend and new boyfriend decided to sort out their differences in my flat, resulting in hundreds of pounds of damage and the Police being called. So how much did this little fracas cost me? Not a penny. The agent made sure that all of the damage was repaired and the whole place was re-decorated. In fact, the apartment looked much better after the punch-up than it did before! One of the boyfriends was in the Army and the other was in the Civil Service. The agent made a few phone calls and they both paid up.

    If you are renting out your house, then of course you might want a cheap holiday home, somewhere to live during those long summer holidays. Have you ever heard of a country in SE Europe called Bulgaria?
    Newstein likes this.
  16. amysdad

    amysdad Established commenter

    Depends if there's a mortgage.

    Remember that if there's not, and we're talking about a substantial rent per month in London, then there will be income tax to pay on it. Also, it depends what your intentions are after the 2 years - will you come back to the UK, continue teaching abroad, or retire?

    I would suggest keeping it at least for the duration of your first contract, so that you at least have something to return to. If you don't need the income from rental, you could also consider not renting it out and just returning to it for holidays - I also know of someone who organized 10-month rentals so they could stay in their house over the long summer holidays.
    Newstein and Lara mfl 05 like this.
  17. the hippo

    the hippo Lead commenter Community helper

    Well, even if there is a mortgage, the company that arranged the mortgage might be amenable to the property being rented out. In any case, the OP should inform the mortgage company that they are going to be away for the forseeable future. This also needs to be discussed with the insurance company as well.

    As some of you may perhaps recall, this old hippopotamus retired last summer. Then Mrs. H. got fed up with me and so she told me to get another job. So now I am teaching again. Yes, the OP might be planning to do two years and then retire, but things do not always work out how we planned.
    Lara mfl 05 likes this.
  18. frogusmaximus

    frogusmaximus Occasional commenter

    Dear OP

    My recommendation:

    Do nothing for the first six months and see if you enjoy living overseas. You may not and wish to return home before your contract expires, and find yourself homeless if you have rented out. Like me, as you approach retirement age you may enjoy the experience overseas and feel you would prefer to become an expat in retirement. You could then start the process of selling. In my experience, once you've rented for longer term, your home no longer feels like yours when you return.

    The value of your home is substantial. You need to take some financial advice no matter how unpleasant that may sound. My money from selling my home is invested and returning 7%.
    Newstein likes this.
  19. taiyah

    taiyah Occasional commenter

    Keep it simple.....

    Food, shelter and water. Shelter has always been the most expensive of the three necessities. If you have it, keep it. If you don't, you best start saving particularly if you are near retirement age.
  20. rideemcowboy

    rideemcowboy Occasional commenter

    Rent! It is a safer investment. You may stay longer overseas than you expect and it gives you options on your return.
    Lara mfl 05 likes this.

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