Yesterday we talked about how you could save yourself thousands of pounds by selling your UK home yourself, cutting out the estate agent middle man with all his fees, and using the savings you make in the form of these fees to fund your new life abroad.
But we also touched upon the fact that selling a property in a downturn and by yourself can be tough, and it might not be the right or best decision for you at this point in time. However, if you don’t sell, this of course leaves you with a dilemma about what to do with your property in the UK when really you want to live overseas.
In this report we’re going to show you how you could become one of an increasing number of so-called ‘reluctant landlords’ who can rent out your UK property instead, to allow you to escape to your new life abroad…
‘Reluctant landlord’ is the name the media has given to those who have been forced out of their own homes and forced into renting them. It covers a wide sector of society who have actually been either unable to sell their principle residence, or unwilling to offload it at a reduced price. Such people may have had to move from their home to take up a new job elsewhere, or been forced to rent it out to cover mortgage payments for example.
And in theory, the name could apply to you if you decide that you don’t want to sell your home in a hurry, you’re unwilling to take a low offer just to get it sold, and yet you don’t want to remain in your home waiting and waiting for the British economy to recover to the point at which it makes financial sense for you to move abroad.
Renting your property out could provide you with the ‘get out of UK card’ you’ve been looking for – what’s more, it could also be the most sensible approach to managing your property matters.
Why Buy or Sell When You Can Rent?!
There are two very good reasons for not selling your British property when you’re moving abroad, and they are: -
1) If you don’t sell in the UK you probably can’t buy abroad and this is a good thing.
2) If you don’t sell in the UK and you don’t buy abroad, you can always return home if you need to.
Point 1 - You may now be confused about the fact that not being able to buy a property abroad is a good thing. But please believe us, it is. No one should buy a property abroad unless they have been living overseas for at least 6 – 12 months. This is because it will take that long to get a feel for the place, to ensure you’ve made the right decision about relocating overseas and to look around where you have moved to in a bid to find the right neighbourhood in which to buy a property.
Point 2 – If you retain your home in the UK and you only rent abroad, you can walk away from your new life overseas more quickly, easily and cheaply if you decide it is not for you.
In this age of real uncertainty where many people moving abroad are actively doing so to escape circumstances in the UK that are not of their making, we at Shelter Offshore have a feeling that the increased exodus will also result in a higher than average number of repatriates as they discover that what they are running from cannot really be escaped abroad.
There are those running because they are in debt in the UK – but debt can follow you. There are those running because they realise the UK is in the economic doldrums – but the same can be said of many countries abroad. There are those who are running because they cannot see possibility for an improvement in the quality of their life or that of their children’s in the UK…and unless they find what they’re looking for abroad, they could become disillusioned and return.
Rent at Home and Rent Abroad
Perhaps the best thing you can do for you, your family, your wealth, your security and your home is to rent out your property in the UK, and rent a new home overseas.
Step One – Planning to Rent - you need to begin planning to rent out your home 6 months ahead of your move at least, that’s because it can take time to get everything in place in the UK, and to find a place to move in to abroad. Think about whether you will be letting your property furnished or unfurnished, and if the latter, whether you’ll be storing or shipping goods abroad. If you’re unsure about moving abroad, maybe storage makes more sense, as it’s cheaper than shipping overseas and then having to ship back if you change your mind! However, having your own stuff around you when you move to an unfamiliar setting overseas can make it easier to settle in. A lot depends on your commitment to this move.
Step Two – Letting Agents - unless you have a trusted family member or friend who will take on the management of your home, we strongly urge you to find a reputable and longstanding letting agent to manage your property’s rental for you. They do charge a fee, but or that fee they should find you tenants, manage your home, collect your rent and support you.
Step Three – Tenants - even if you decide to rent your house to friends or family, have a proper legal contract in place covering responsibilities of tenant and landlord. Get references and deposits secured, and know that finding reputable and reliable tenants can be something of an art – which is where a good agent is really worth their weight in gold!
Step Four – Legalities - there are laws you have to follow and rules you have to abide by but they are straightforward. To bear in mind are getting the safety aspects of the rental right. You need electrical and gas inspections done, you need smoke and carbon monoxide detectors, and there is a free guide from the government called assured and assured short tenancies, a guide for landlords that you should get and read.
Step Five – Your Mortgage - you need to let your mortgage company know what you’re doing, they may force you to change mortgage to a buy to let one. One way around this is to explain you’re going abroad for a short period of time only, but if your circumstances change, you will let them know. Don’t be bullied.
Step Six – Your Insurance - you have to let your insurer know that someone else will be living in your home. This changes the risks for them and possibly the premium for you. Do not overlook this point or you could find you are uninsured if something happens.
Step Seven – Your Tax - once you move abroad and become non-resident in the UK for tax purposes, any income you earn abroad is usually taxed abroad, but because you’re retaining a home and an income is being earned from it, you will be liable for UK tax on that income. Speak to an accountant to get the low down, but be prepared to still fill in a self-assessment form
Having covered the UK property it is now down to you to find a home abroad that you and your family are happy living in, and to make the slow but positive progress towards hopefully making a new life abroad.
