An Expat’s Guide To Being An Absentee Landlord
A buddy of mine recently left UK for a high-paying job in Singapore. Don’t get me wrong. He’s very excited about his new adventure on the other side of the earth, but he had a hard time deciding if he’s going to sell his house or let his house go into private renting while he’s away.
If you’re in the same position, better drop everything that you’re doing and read on for the solution.
Overseas work is not always permanent. If the contract you signed would end in a matter of months or years, it’s better to be renting out your private home in the meantime. So that when the time to go home comes, you’re going to have a house ready and waiting for you!
However, if you’re already planning to migrate to another country and don’t ever want to return again, then it’s best to just sell the property to another owner.
Finding the best agent
Most absentee landlords hire the services of letting agents, but, sometimes, “bad” agents neglect the duties they promised to their clients.
The best solution to avoid hiring “bad” agents is to ask, during their interview, if they are game to do tedious tasks like finding the right tenants, delivering and collecting keys, carry out inspections, and even conduct an inventory when the lease expires.
Another piece of property renting advice to avoid these bad apples is to get other landlords’ feedback! Talk to other expats, who are currently renting out a property in the UK, and ask if they can recommend an agent or lettings agency that can really look after your property properly.
How Much Will Everything Cost?
I’m not going to sugar coat this, hiring a letting agent leaves a very big dent on your profits. Some charge as much as 12-15 per cent of the monthly rent.
If you can’t bear to lose that much money, you have 2 alternative options. First, is to do everything yourself. While it would really help you save a lot, the downside is that it’s very stressful to deal with tenants’ requests and other maintenance issues when you’re living half way around the world.
Second, ask a favor to your close friends and family to check on your private renting property every now and then.
Notify the bank and insurers
If you took out a loan to buy your house, you have to notify your lender or bank about your decision of selling or renting to them, or risk breaking the terms and conditions of your mortgage contract.
You must also tell your current insurers that you plan to let out your home, and factor in the additional cost of a landlord insurance policy. This is important in order to protect you against accidental damage, tenants defaulting on their payments and legal costs associated with contract disputes or repossessing the property.