Sell or rent your property

When you’ve found your ideal home abroad and everything over on that side of things is settled, you’ll still have to arrange your home in the country you are migrating from.  For some people, that’s easy enough: their home abroad is their first property purchase, and setting their affairs in order back home simply means telling the landlord and vacating the property. But they’re the minority. The vast majority of people who buy property overseas already own property.There are clearly two options: rent or sell. For overseas property buyers who have remortgaged their home to buy their foreign property, or who are still paying off a substantial mortgage, renting may be a more attainable choice.  However it can still leave a mortgage shortfall and it’s important to have a strategy for when the property is empty or the rental income has to offset against repair costs.

It’s important to be aware that renting a house out is more demanding than many first time landlords realize. You’ll be liable for repairs, tenants might not treat your house the way you want them to (it’s your house, but their home) and the process might end up costing you money.  One way to avoid this is to go through an estate agency rather than a property management company.  The big difference is that estate agents have to be accredited to operate. Property management companies don’t. Even reputable-looking ones that are part of big companies don’t always come through for you. An estate agent will often undertake to guarantee your rental income, sometimes even when the property is vacant.  This is far closer to what most overseas landlords want – regular payment and no hassles, which the estate agency will take care of.

Depending on where your house is and what the rental demand is in the area, it might be worth having it made into flats or student accommodation.  In cities with large student populations, student accommodation can be a good choice for a landlord, since the tenant is often backed by the bank of Mum and Dad and rental demand is strong. Alternatively, a larger house converted into flats can be a good choice, giving access to a different and larger portion of the rental market. However, it’s important to realize that significant financial outlay will be involved to meet fire safety and other regulations. This method is definitely an investment.

Selling your house back home is hampered by the fact that you’ll be overseas. It will be harder for you to arrange business matters when you have to fly in from Greece to do it. Ideally, you could sell and then arrange your foreign move, but in fact no-one really does it this way round, for the obvious reason that you’d be selling your house with no idea if you had anywhere to move to or not. So most overseas dwellers seeking to sell their home are involved in the process of buying an overseas property and moving their lives abroad before they begin selling their property back home.

The advice here is get professional help you can trust. This is even more important if you won’t be present to watch over things. A decent solicitor, preferably one who has had a satisfied client in your position before, will make the process much, much easier.

One reason why many expatriate Britons have chosen to rent rather than sell in recent years is the state of the housing market, which is depressed, leaving many facing a loss of thousands if they sell now.  However this means it’s a good time to consider buying your UK house in partnership with family members and coming to an arrangement with them. Some people buy with family and leave their family in charge of letting the house out; others co-buy and the family member pays the mortgage. Either way, it can be a lot more hassle-free than tenants you don’t know.

Finally, it’s important to think ahead in terms of tax. Houses are subject to capital gains tax if they stop being your main home and appreciate in value. Consequently you should get your house valued and get the valuation in writing approved. The UK government offers a Capital Gains Tax calculator but this only applies for the current year. You also need to investigate the taxation system of your destination country: how much tax will potential rental income be liable to?  If you sell your home in ten years, will the money you make be taxed in the country you migrated from and then again in your new home country?  Some countries, like Canada, have agreements with the UK so that you only pay one lot of Capital Gains Tax . Check where your destination country stands on this.

For further information, ask the experts