To rent it out or to sell???

[jbinuk]

hi,

I have a friend who is a UK resident and and planning to migrate to another country. She has her own property here for more nearly 3 years and cannot decide wether she sells it or rent it out while she lives in another country far from UK.

I personally advised her to rent it out but I am not quite sure how it is going to be easy to have your house rented out while you are living in another country. Because if it will be too much hassle then she thinks of just selling it.

Any thougths regarding this?

Thanks.

[sakura]

hi,

I have a friend who is a UK resident and and planning to migrate to another country. She has her own property here for more nearly 3 years and cannot decide wether she sells it or rent it out while she lives in another country far from UK.

I personally advised her to rent it out but I am not quite sure how it is going to be easy to have your house rented out while you are living in another country. Because if it will be too much hassle then she thinks of just selling it.

Any thougths regarding this?

Thanks.

I say rent...does she have any family members who can help her out? I'm no expert, but I think she can either rent it out to her local council, who then find tenants (ppl on housing benefits, or low-income families, etc), but that might be tricky in terms of contracts. Or rent it out privately to working professionals and have yearly contracts. Then just leave a bank account for monthly payments in. She can either have a family member (who she trusts) to manage it (and I guess give some fee for time spent ) or leave it to a lettings agent, who will do all the contracts, etc for her (for a fee).

Given the UK housing market is good now, she could either sell it and make a fortune (won't she have to pay tax if she's taking the money out the UK?), or rent it out and 'mint it'. If market crashes....or, if she returns to UK...at least she still has/will have a roof over her head! But, you know, overseas property is very much en vogue.

[jbinuk]

Thanks for the reply.

Unfortunately, she does not have a family here to look after the property. The only option if she decides to rent it out is to have an agent to manage it. But is it not very expensive or difficult to have a property management agency to look after your house?

I just personally find it difficult because while you're away..you will always be thinking about your property here.

[SK1]

Thanks for the reply.

Unfortunately, she does not have a family here to look after the property. The only option if she decides to rent it out is to have an agent to manage it. But is it not very expensive or difficult to have a property management agency to look after your house?

I just personally find it difficult because while you're away..you will always be thinking about your property here.

I have a friend who lived in the UK for 7 years but decided to leave to go back to his native country 7 months ago. They decided to rent out their 2 properties over here, but decided to get a friend to "look" after it for them as they didn't want to pay a managing agent for their services (which does add up and they not cheap). Long story short, the one property has had only one issue that needed attention and was sorted without spending loads of money. However the other property has had problem after problem since they left and has cost them dearly. To the effect that my friend ended up coming over to the UK twice to sort it out himself. He enjoys DIY and would rather fix problems himself than pay loads of cash to have it fixed. What saved him was that he travels a lot to Europe on business and this allowed him to get "free" flights to the UK to sort out the problems. He now lives thousands of miles away...

On top of this he also lost some very good tenants as the problems were severe and did not get sorted soon enough. I don't know how the situation stands now, but I know he had to get a new managing agent and is in the process of getting new tenants, which will affect his pocket as well.

So, if your friend don't want to get agents to manage it and will be very far from the UK like my friend, then I'd say sell it. There's so much that can go wrong in a sort space of time and tenants will NEVER look after your property like you would. She may have been able to live with certain problems in the property, but tenants (some) can be demanding and may not tolerate it. They want to get their rent's worth.

Another thing to consider is what will the exchange rate be between the UK and the country she will be moving to. My friend now lives in a country where the exchange rate counts strongly against him and is also limited by his native country from sending loads of money over. Will her "new" country allow her to send money over if she need to top-up her mortgage (if she has one) over here or if she has to pay for something to be fixed? There is a lot to consider.

Thats just my view from my friend's experiences. Maybe he's just been unlucky. I have always thought of doing the same one day, but now I'd think twice. It can be highly rewarding or it can become a disaster...she must decide!

Regards

SK1

[jbinuk]

Thanks SK1.

I completely agree with you..that's exactly what I told her as well. It will be very frustrating to worry about your house here when something goes wrong and that you need to be here to sort it out. She also have to think what happens if her property is vacant..then she has to pay the mortgage from her own pocket..

Yes, it will may be rewarding in the long run but only if nothing goes wrong with the property and you are right, tenants will never look after your house the same as you do. But I told her I'd rather sell the house even if she will gain very little from what she had invested but it will give her a peace of mind and no need to worry about something far far away. She can still use the money she earned from the sell of the property and instead invest it in a property where she decides to live for good.

[SK1]

Thanks SK1.

I completely agree with you..that's exactly what I told her as well. It will be very frustrating to worry about your house here when something goes wrong and that you need to be here to sort it out. She also have to think what happens if her property is vacant..then she has to pay the mortgage from her own pocket..

Yes, it will may be rewarding in the long run but only if nothing goes wrong with the property and you are right, tenants will never look after your house the same as you do. But I told her I'd rather sell the house even if she will gain very little from what she had invested but it will give her a peace of mind and no need to worry about something far far away. She can still use the money she earned from the sell of the property and instead invest it in a property where she decides to live for good.

jbinuk,

It's all about being realistic and doing all the sums to see it she can afford to keep the property and be able to fund it from another country. Say for instance, if she is confident that the property is in good nick, and can accumulate 6 months worth of mortgage payments as savings and then rent it out, then that can cover times when the property is vacant or when something has to be fixed. If she can't save anything (or enough) before she leaves the UK, then it will be financially risky. It all depends on her financial situation.

I'm not trying to spook her, but if she's a cautious person and not a risk taker and money is tight, then I'd advise her to sell. Unless she decide to come back to the UK in the next few years, then she may want to keep it.

Difficult situation, but all we can do is advise her of the pros and cons. It's up to her to make that all important final decision.

Regards

SK1

[contractors_in_uk]

My advice.. sell it mate.. its

If there is a mortgage due on the house/flat and you would need an estate agent to manage the property whilst away then it makes sense to sell it..

Also the house prices are at tipping point and at a very unsustainable levels.. with interest rates on the rise and homepacks becoming mandatory come june 2007.... your friend might as well sell it now...

I have sold my three bed semi and renting now.. I reckon the house prices gonna go down.. renting is cheaper than buying in london... Some interesting info available at www.fool.co.uk and www.housepricecrash.co.uk

Hope it helps..