We've had a lot of correspondence recently from aspiring travellers who are in a quandry over whether to sell their properties before they go or not. Has anyone out there been in a similar situation? If so, any feedback about how you've felt about it since then or what factors made you sell or not would be very helpful to our readers.
PeterD said
02:17 AM May 29, 2005
We did not want to be without a base so we moved into a manufactured homes village. The benefits are that you have the security of an onsite manager and thus get insurance without the 60 day clause (the clause that says that you can not leave a house vacant for more than 60 days without special circumstances.)
For pensioners you can get rent relief as you are renting the land - even though you own your home. You thus do not pay more for the net rent than the average body corporate fees.
regards PeterD
Barraman said
10:06 PM Jun 15, 2005
We thought long and hard about selling up before we left but in the end decided to rent out our property (near Melbourne). There are pros and cons of both, of course, but the thought of returning home and not actually having a home tipped the balance. The major worry of renting it out was that we weren't there to deal with any problems but, touch wood, nothing major has gone wrong. And in any case, we hired a company do handle the process and to deal with any issues from the tenants. It puts your mind at rest so we'd certainly recommend doing that.
Anvid said
07:59 PM May 16, 2011
We are in the same situation and are taking the plunge by sellling. Living in cold, cold Canberra leaves alot to be desired...
Several of our advisors asked if we thought we would return to live here and we both said "no" as we were considering renting our house. We were told that it is very likely that the property boom in Australia will come to an abrupt end (like in Ireland and other areas of the world) and that it is only a matter of time, so.... We are currently selling with a view of travelling our great country.
Our personal items will be in storage until we do settle down although it is a worry about not having a base to return to. We are thinking of getting a simple camper and doing house-sitting and voluntary work from place to place with perhaps two to three months in a location.
Nicholstones said
05:04 PM May 17, 2011
Although we don't intend to ever go back and live in our house in Melbourne again, we have it rented out. When we do decide to settle down somewhere (somewhere warmer and all-year-round golf friendlier) we'll sell our existing house and buy in the new place.
Pros:
- the rental income is a significant addition to our travelling budget
- no matter what happens in the housing market we'll be able to exchange to a house at least the same standard. If the market goes up, we'll get more when we sell our current house, if the market goes down, the new place should be correspondingly cheaper.
- if, God forbid, accident or illness suddenly stopped us travelling, we could ditch all our plans and go back to our house without too much hassle.
Cons:
- there is a risk that the place will get trashed, but with landlord insurance and a good agent handling the property this is minimised. Besides, as a nice house in a good suburb, its not like your usual rental property, so it attracts the more reliable sort of tenant.
- if we continued travelling for more than 6 years then there would be Capital Gains Tax implications.
jimricho said
06:17 PM May 17, 2011
Nicholstones wrote:
....- there is a risk that the place will get trashed, but with landlord insurance and a good agent handling the property this is minimised. Besides, as a nice house in a good suburb, its not like your usual rental property, so it attracts the more reliable sort of tenant.
- if we continued travelling for more than 6 years then there would be Capital Gains Tax implications.
As pointed out, having a good agent is essential, and most probably the landlord protection insurance is conditional on the property being so managed. I have found that the agent is more likely to be fussy about the tenants they put into one's property if one is a "good landlord". It is also good to be able to remain at "arms length" from the tenant in the event of problems and the tenancy act(s) can be a legal minefield that often looks on the tenant as the "underdog".
Having a good accountant is also essential as tax matters get a whole lot more complex when one has rental property, especially in regard to CGT as alluded to by "Nicholstones".
For all that, barring special circumstances, IMHO this is a better strategy than completely selling up even if it means settling for a more modest set-up on the road.
(please regard these comments as being an opinion only and very general in nature)
Duh said
10:52 AM Apr 2, 2013
Anvid wrote:
snip......We were told that it is very likely that the property boom in Australia will come to an abrupt end (like in Ireland and other areas of the world) and that it is only a matter of time......... ................................................................................................................
There will always be up and downs (highs and lows) in the real estate market that usually go in cycles although there can be exceptions from time to time. It used to be in approx 5 years cycles, but I don't think that applies any more.
In WA at the moment prices have been way down but are starting to rise again, I don't know about the market coming to an abrupt end but who knows, nobody has a crystal ball. I think it is more likely like the Nicholstones have said what goes up will come down and vice versa, if you sell and buy in the same time period and market cycle it will be about the same.
That is, if renting your property and you sell and then buy in the same market it won't make much difference. However if you sell when prices are low and then travel you would need to wait for prices to drop again (but would never drop to the same level as before) to buy at a reasonable price. If you sell when prices are high, there will be less impact when you buy again but as prices rise over time in general whether in a high or low market it will still cost a lot more to buy a home.
If you invest the money you get from your home you may be able to offset this somewhat, however you would have to look at tax implications generally or as others have said the capital gains implications etc.
-- Edited by Duh on Tuesday 2nd of April 2013 10:54:10 AM
Neil Judy said
05:20 PM Apr 2, 2013
Hello to everyone this is a two part reply. Firstly we are new to the greynomads forum so hello from me Neil and Judy. My wife Judy and I have taken the plunge and have sold our home in Pakenham and are currently renting until I retire next year. We are in the process of getting set up for touring, waiting for our new Jayco Sterling to be built and downsizing our belongings.
Some hard decisions regarding the house, but having been burnt financially over the past few years, it came down to keep working past 70 possibly close to 80 to pay off our mortgage, or find a different way. There has to be more to life than working to pay off a mortgage. If we stick to our plan we wil be away mid next year and will travel for at least five years. There is a lot to see and still years to do it.
cheers Neil & Jude
Big Gorilla said
05:48 PM Apr 2, 2013
Don't Sell...... This is a different story but the end result is the same. I had a big home in Brisbane, a Unit on the Sunshine coast and some investment properties. In the mid 80s I was offered a job overseas and after not so careful consideration, decided I would probably never come back to Australia. I sold everything and off I went. After about 20 years, remarried, decided to go back. We had been to Australia a few times touring around in the past 5 years and I asked my wife where she would like to go. She said she liked Tasmania. We set off for Tasmania with a suitcase full of clothes....Nothing else... We could have purchased a house in Launceston for $80,000 but delayed because I didn't know if we would stay there. Now after 9 years median house price is around $200,000.00 and we are still there, renting.. To cut a long story short I often wished I had kept just one property, the unit on Sunshine Coast actually. so if you decide to go on the road, think seriously about renting your home. Apart from providing some income, if circumstances change you have somewhere to go back to..
msg said
08:03 PM Apr 2, 2013
Don't forget the costs of selling and rebuying. Real Estate fees when you sell and Stamp Duty when you buy.
Gerty Dancer said
08:59 PM Apr 2, 2013
Did anybody notice this thread was started in 2005!!!!
And the subject is still relevant... theres been 2 threads on this in the last couple of weeks. Goodonya Cindy! for such a long-lived helpful friendly forum.
Duh said
11:43 PM Apr 2, 2013
And full marks for the posters who did a search for the subject before starting another one!
Good spot Gerty !
Beth54 said
02:49 AM Apr 3, 2013
Duh wrote:
And full marks for the posters who did a search for the subject before starting another one!
Good spot Gerty !
And a big GN welcome to Newbies Neil and Jude.
Andrea said
04:18 AM Apr 3, 2013
Old thread, perhaps, but obviously still very relevant with so many newcomers (welcome, Neil & Jude!).
We did what almost everyone says is not advisable: four-and-a-half years ago we dived in at the deep end, sold up our only asset of house and land, got rid of 35 years of accumulated 'stuff' and went 'feral' in our newly-built Australian 5th-wheeler. We've never looked back, and so far there's no way you'd get us back into a house without wheels, even after a couple of hitches when John had a mini-stroke last year, and now with him waiting for a new hip later this year.
We'll never be able to buy real estate again, and maybe we'll live to regret it one day...but we doubt it!
We thought long and hard about selling up before we left but in the end decided to rent out our property (near Melbourne). There are pros and cons of both, of course, but the thought of returning home and not actually having a home tipped the balance. The major worry of renting it out was that we weren't there to deal with any problems but, touch wood, nothing major has gone wrong. And in any case, we hired a company do handle the process and to deal with any issues from the tenants. It puts your mind at rest so we'd certainly recommend doing that.
We are in the same situation and are taking the plunge by sellling. Living in cold, cold Canberra leaves alot to be desired...
Several of our advisors asked if we thought we would return to live here and we both said "no" as we were considering renting our house. We were told that it is very likely that the property boom in Australia will come to an abrupt end (like in Ireland and other areas of the world) and that it is only a matter of time, so.... We are currently selling with a view of travelling our great country.
Our personal items will be in storage until we do settle down although it is a worry about not having a base to return to. We are thinking of getting a simple camper and doing house-sitting and voluntary work from place to place with perhaps two to three months in a location.
Pros:
- the rental income is a significant addition to our travelling budget
- no matter what happens in the housing market we'll be able to exchange to a house at least the same standard. If the market goes up, we'll get more when we sell our current house, if the market goes down, the new place should be correspondingly cheaper.
- if, God forbid, accident or illness suddenly stopped us travelling, we could ditch all our plans and go back to our house without too much hassle.
Cons:
- there is a risk that the place will get trashed, but with landlord insurance and a good agent handling the property this is minimised. Besides, as a nice house in a good suburb, its not like your usual rental property, so it attracts the more reliable sort of tenant.
- if we continued travelling for more than 6 years then there would be Capital Gains Tax implications.
As pointed out, having a good agent is essential, and most probably the landlord protection insurance is conditional on the property being so managed. I have found that the agent is more likely to be fussy about the tenants they put into one's property if one is a "good landlord". It is also good to be able to remain at "arms length" from the tenant in the event of problems and the tenancy act(s) can be a legal minefield that often looks on the tenant as the "underdog".
Having a good accountant is also essential as tax matters get a whole lot more complex when one has rental property, especially in regard to CGT as alluded to by "Nicholstones".
For all that, barring special circumstances, IMHO this is a better strategy than completely selling up even if it means settling for a more modest set-up on the road.
(please regard these comments as being an opinion only and very general in nature)
-- Edited by Duh on Tuesday 2nd of April 2013 10:54:10 AM
Hello to everyone this is a two part reply. Firstly we are new to the greynomads forum so hello from me Neil and Judy. My wife Judy and I have taken the plunge and have sold our home in Pakenham and are currently renting until I retire next year. We are in the process of getting set up for touring, waiting for our new Jayco Sterling to be built and downsizing our belongings.
Some hard decisions regarding the house, but having been burnt financially over the past few years, it came down to keep working past 70 possibly close to 80 to pay off our mortgage, or find a different way. There has to be more to life than working to pay off a mortgage. If we stick to our plan we wil be away mid next year and will travel for at least five years. There is a lot to see and still years to do it.
cheers Neil & Jude
Don't Sell...... This is a different story but the end result is the same. I had a big home in Brisbane, a Unit on the Sunshine coast and some investment properties. In the mid 80s I was offered a job overseas and after not so careful consideration, decided I would probably never come back to Australia. I sold everything and off I went. After about 20 years, remarried, decided to go back. We had been to Australia a few times touring around in the past 5 years and I asked my wife where she would like to go. She said she liked Tasmania. We set off for Tasmania with a suitcase full of clothes....Nothing else... We could have purchased a house in Launceston for $80,000 but delayed because I didn't know if we would stay there. Now after 9 years median house price is around $200,000.00 and we are still there, renting.. To cut a long story short I often wished I had kept just one property, the unit on Sunshine Coast actually. so if you decide to go on the road, think seriously about renting your home. Apart from providing some income, if circumstances change you have somewhere to go back to..
And the subject is still relevant... theres been 2 threads on this in the last couple of weeks. Goodonya Cindy!
And full marks for the posters who did a search for the subject before starting another one!
Good spot Gerty !
And a big GN welcome to Newbies Neil and Jude.
Old thread, perhaps, but obviously still very relevant with so many newcomers (welcome, Neil & Jude!).
We did what almost everyone says is not advisable: four-and-a-half years ago we dived in at the deep end, sold up our only asset of house and land, got rid of 35 years of accumulated 'stuff' and went 'feral' in our newly-built Australian 5th-wheeler. We've never looked back, and so far there's no way you'd get us back into a house without wheels, even after a couple of hitches when John had a mini-stroke last year, and now with him waiting for a new hip later this year.
We'll never be able to buy real estate again, and maybe we'll live to regret it one day...but we doubt it!
Andrea & John