Moving overseas and wondering if you should rent out your home? Letting your property while living abroad can be the ideal option for expats on short-term assignments, or for those who are unsure as to how their move overseas will work out. Not only is renting out your home a great source of income, but it also guarantees that you have somewhere to come back to if and when you decide to return home.
Here are our top tips for letting your property when relocating abroad
1. Do your research
If you've never rented out a property before, you should start by researching your local area to see what the current rental market values are, and familiarise yourself with the rules and regulations around letting a property in your home country.
2. Make your home “tenant-ready”
Redecorate and refresh your property before you advertise it so that it is clean, modern and in good repair. New paint, carpet and light fittings can be a cheap but effective way to update a property. Having your property in good shape will not only increase the rent you can charge, but also decrease the chance of problems after the tenants move in.
3. Furnished or unfurnished?
You need to decide whether you want to offer your house as a furnished property, and if so which items you intend to leave. Other items which you are not planning to take abroad with you will need to be put into long-term storage. You may also wish to sell some of your personal belongings.
4. Communicate your plans with your bank
If you have a mortgage, you should contact your mortgage provider and obtain prior consent for your intention to rent out the property while you are overseas. It is crucial that you inform your mortgage provider that you will be renting your property while you are living overseas as this may have implications for your mortgage agreement.
5. Put landlord insurance in place
You will also need to inform your insurance company that you will be renting your house as your existing home and contents insurance will not be sufficient. You may be required to draw up a new agreement that covers the tenants in your absence.
6. Should you hire a property manager?
Being a long distance landlord has its own set of unique challenges which may require the help of a professional property manager who will manage every aspect of renting out your home from finding tenants to carrying out repairs. A property manager can take the stress out of the whole process and give you peace of mind, although it does come with a fee.
If you want to maximize your income, you can rent your house on your own; but there are things you need to consider. Although you might be living half way around the world, you are still responsible for your tenants and managing the property. As the landlord, it’s your responsibility to get repairs done in a timely and effective manner. Find a reliable repair person before you move, and develop a relationship with them. It is also helpful to have a family member or close friend serve as a contact person for the tenant should any issues arise.
7. Understand the tax implications
When you rent your house, this will be classed as income and therefore you will most likely be required to pay taxes in your home country. There are certain costs which can be offset against your income to reduce your tax liability, and you may have a personal allowance which means you can earn a certain amount before being taxed. In addition, if you decide to sell your house at any time, you may be subject to capital gains tax as well. Your income may also be subject to tax in your new country of residence.
Therefore, before making any decisions, you should speak to a qualified tax adviser so you fully understand what the requirements and obligations are in your home country.
