keep the house? sell the house?

[elizamina]

So after several years overseas, we came home three years ago due to family reasons. We've since bought a house. For various reasons, we're seriously considering going overseas again in the next few years.

For those of you who went overseas while owning property, how did you handle it? Did you rent out the house through a property management service? Leave the house vacant but pay someone to look after it? Some third option I'm not thinking of? How did it work out for you? Was it worth it?

Or did you just sell the house?

We'd prefer NOT to sell the house, but I'd like an idea of what a realistic plan of action might be.

[wrldtrvlr123]

We've twice sold houses when going overseas because we did not want to think about renting, managing, worrying about every hurricane, storm, flood etc and for us the financial logistics didn't seem to make sense with keeping them as an investment.

Many people do keep their houses with various plans in place. Hopefully you'll get some input from them.

[Thames Pirate]

Ours is rented out through a property management company. Deciding factors were local rental market (college town means high demand for rentals) and interest rate (we refinanced at such a low interest rate that we will never find that again--we would be stupid to pass that up). Right now we are still paying a small amount of the mortgage ourselves, but that should change soon. The first year was rented to friends of ours, and they got a better rate. It has gone up a bit now, and by next year the rent should entirely cover the mortgage and the fees. Obviously major repairs are still ours, but we know what to expect regarding things like roofing and plumbing. In the long run it's an investment.

If you can't rent it for at least enough to start paying off principal, it isn't worth it.

[vandsmith]

or if you're lucky enough to have parents in the area, have them look after it. better yet, sign it over to them if possible. we do this with our parents, who are retired. property management companies can be expensive!

v.

[sid]

My first go at renting out a house ended with both civil and criminal judgments against the tenants, and then years of collecting tiny payments from the tenant who wasn't in jail. The monetary judgment against the jailed tenant was written off. No, he didn't end up in jail as a result of being my tenant, but the judgments related to my house surely didn't help as the judge pronounced sentences for his other, more serious, crimes.
My second tenants were a dream, but when they moved out and I had an opportunity to sell at a reasonable price, I took it.
Overall the hassle of owning from abroad was just way too much work, and I wasn't willing to put myself or my parents through it anymore.
But there are so many factors to consider.
Can you afford to cover the mortgage without renting out? Do you want to return there for summers and holidays? Will you return to live there at some point? Do you have children who would benefit from a "home base" during your overseas adventure years? Do you have family and ties in the area that mean you are likely to stay close to the area? Is there a good rental market, and good agencies in the area to do all the heavy lifting for you? If you rent it out, would you move all your furniture out to storage? What would that cost you?
There's no one-size-fits-all answer.

[alexout]

I wanted to keep my house, but after having trouble finding a property manager willing to take on a house instead of an apartment, hearing more tenant horror stories than good stories, and realizing that an older 4-bedroom house with a lot of land was not what renters were looking for in my area, I decided to sell.

It was the best financial decision in my life. The house had doubled in value since buying it and had a very small mortgage. I sent all the money to Vanguard and watched it grow. There is no way the house would have made that much money in the same amount of time. Granted, the stock market has been doing very well, and in another scenario I could have lost money. I might still lose money, but so far, it's doing well. But at the same time, I'm not dealing with tenants, property managers, lawn care services, snow removal services, repairs, maintenance, state taxes, county taxes, property taxes, school taxes, accountants, etc.

With the money the sold house is making for me now, I will end up buying a much nicer one later on.

(This is where all the warnings come about investing: past performance does not guarantee future success, etc. etc.)

[shadowjack]

We kept it as part of our retirement strategy. It will generate monthly revenue and we can even live in part and rent out the other parts if we choose. The big problem with sitting on a wad of cash when you retire is you want your cash to be earning for you, not you sucking it out to live. Every time we go back home, I notice how things are more expensive than before, and definitely feel that property revenue will help prevent us from tapping our other money. But we have a property management company and they handle everything.

[tommypizza]

Kind of depends on your market. I live in a University town with a tight rental market. I would say keep and rent as I did for 10 years. Over that 10 years, I developed an unbelievable credit rating and the house increased in value. We came back to the USA, refinanced the house and bought another one which we live in now. Like you, I'd like to head out again soon. We will keep the houses rented and build up some equity. Like I said though, it depends on your market.

I"ve done it 2 ways.

Rented to friend: In the beginning, everyone is enthusiastic. Friend says he will do all kinds of upgrades to the house. I charged rent but it was fair. When I returned after 2 years, it didn't look like he had walked out the back door in 2 years. Really?! All I could do was grin and bear it...he did me a favor by just living there.

Property manager: This is the way to go. No major worries as long as they provide proper services. You can pay anywhere from 6-12%...maybe lower?!.

I would keep the house. You always have a place to come back to and it's a good place for your money to stay. I live in a high growth area, so I've seen the value of my house rise. I guess it also depends on how active or stagnant your market is. If there's little chance for growth, maybe it would be good to cash out...but if you like the house, location and low vacancy rates...keep it!

Good luck!!

[Overhere]

I have a different take on why you might want to have a home, back home. The OP makes reference to family and thats why we kept our home and didn't rent it, it was a place for our kids to call home when we went back in the summer. They had their room and their stuff. They went to university and they had a place to retreat to on university breaks even when we weren't there. We were fortunate enough to have a mortgage we could afford on our salaries and were not forced to rent the house.

[mamava]

We had a similar experience to Overhear. We kept our house and rented it out when we went overseas. For the most part it worked out well and we enjoyed the income (we had the house paid off for 6 of the years we rented it out). It got to a point where we could the property deteriorating, though, and the cost to keep it up and never enjoy it was a problem for us. We sold it and bought a townhouse--definitely not what we would choose in other situations, but we have no upkeep or maintenance, it's walk-in ready for us and for our college-aged kids if they want it and it gives our kids a home base, something that became really important as our kids got older, something they asked for from us. There is a cost involved, but for us it is worth making some sacrifices to have that place. It's been 2 years and we have all loved it.

[PsyGuy]

I would caution against considering it an either or option. My general advise is to keep it vacnact in the short term (so that you know you wont need to move back into it right away) and then spend a couple years renting it out using whatever options are available to you, whether its family/parents or using a management company. The market can be so different and volatile, you think you have a great property and it sits vacant for too long or you dont get desirable applicants. If your rent income can pay the mortgage and upkeep costs as well as the management company (anywhere between 6% and 20%, with the upper end combining some type of repair/warranty policy that covers major repairs) than it makes sense to keep it. Someone else is contributing the capital towards your investment. If however after those couple of years its just not working for you and being an expat becomes more a permanent scenario than you can look at selling the property.

This is general advice, it changes depending on where you reside. If youre in CAN for example maintaining property is going to mean you still have a tax connection as far as RC is concerned. If you gain PR or citizenship your foreign property may become a tax liability as well.