Overseas property, problems with tenants, what would you do?

[antaresrus]

Dear forumites,
I have been reading this forum for quite a while and find it‘s people extremely helpful and friendly. It made me think I might get some help here.
This is my first post here as usually I get all info I need from just running the search. But the situation I and my hubby are in kind of unique and we need a bit of an advise/critique from people who are not involved emotionally.
So here is the story…

We have been residing here in Aus for 2 years now, lived in Northern Ireland before where my hubby owns a semi-detached house in a small country town.
After finding out that we like it here in Down Under we were planning to sell it first but then changed our minds as the housing market was booming at a time, so we rented the house out to my husband’s brother and his then fiancée, who became his wife in July last year and their baby daughter was born in mid December.
The contract is for a year, starting 01.03.07, thus expiring on the 29.02.08
At lease as far as we remember as we never got the proper copy from my brother in law. My hubby always trusted his family and I wasn’t aware that he didn’t get it. I recall him receiving and posting letters/emails from/to NI assuming it’s all good.
Then it turned out that the brother “forgot” to send it to us.
And this is only a beginning.

Just before last Christmas sister in law’s mother arrived from Eastern European country which is a part of EU now, where our sister is law is originating from.
In Early January hubby’s brother was forced to leave the house. We are not aware of any certain reasons, he moved back with their mum where he had lived before renting the subjected house with his fiancée. We started worrying both about their young marriage and the future of our contract with them. And here we go.

In about 2-3 weeks time they got back together for just having a really big fight just after one week when my brother in law left the house with some cuts and bruises. He and his sister even called the police to register house violence. Police advised both parties to stay away from each other, not sure if they both have restraining order or is it just an advice though.
Lawyers have been hired, and they are now legally separated/in the process of being legally separated.
Hubby called his solicitor yesterday and asked his to send a letter to sister in law asking to vacate the premises as he is not intending to renew the contract with either his brother or his new (or former? wife.
However his brother being aware she is entitled to rent assistance asking him if she can stay.

We have some kind of plan of what to do next thought not too sure about if it would be the best and that’s when it’s time to ask you the usual “what would you do?”.
1. Vacate the house, and then sell it, buy something in Aus. Its worst time to sell though, RE prices are declining after the boom. http://news.ulster.ac.uk/releases/2008/3617.html But its soooo hard to manage the overseas property, negative gearing doest apply as far as I know.
2 Let sister in law to stay till the market recovers, rent will be on British taxpayers…
a) Get PM from local agency
b) Get the above mentioned hubby’s sister to manage the property. She‘s extremely hard working girl, never misses the opportunity to earn an extra buck pound, can be tough if situation requies, great organisation skills, lives 15min away from the property
3. Evict sister in law, get new tenants till marker recovers, management options same as in n2.
4. Never sell, rent as per n 2 or n3.

Thank you.

 

[steveadl]

Issue 1: Decide whether you want to keep/sell the property. If it is a good financial proposition then why not? If it's costing you too much money which can't be offset, then you need to think hard.

Issue 2: If you decide to keep it - get a PM in there quick smart to sort the mess out! Sure you can try to do it yourself by reasoning with them, or get hubby's sister to do it etc. but in the end - the PM will have more authority (in the tenants eyes) to do the job and not take any excuses or emotional blackmail.

PS Welcome aboard as a poster!

 

[antaresrus]

Steve,
Thank you for your reply.
1. I think we need a right thing keeping property through the boom even not being able to offset the losses.
It does cost us some money, big part of which is... INSURANCES!
Ulster specific it is.
We’d rather sell the house than keep it now just need a bit of recovery on the market, it' really slow now, houses seat on the market forever and ours is not in prime location to make it worse. So we'll try to keep it for
2. We so far intending to use hubby's sister as PM to get us new tenants and look after them. Have to wait till current tenant moves out/be evicted.

 

[skater]

Issue 1: Decide whether you want to keep/sell the property. If it is a good financial proposition then why not? If it's costing you too much money which can't be offset, then you need to think hard.

Issue 2: If you decide to keep it - get a PM in there quick smart to sort the mess out! Sure you can try to do it yourself by reasoning with them, or get hubby's sister to do it etc. but in the end - the PM will have more authority (in the tenants eyes) to do the job and not take any excuses or emotional blackmail.

1. I think we need a right thing keeping property through the boom even not being able to offset the losses.
It does cost us some money, big part of which is... INSURANCES!
Ulster specific it is.
We’d rather sell the house than keep it now just need a bit of recovery on the market, it' really slow now, houses seat on the market forever and ours is not in prime location to make it worse. So we'll try to keep it for
2. We so far intending to use hubby's sister as PM to get us new tenants and look after them. Have to wait till current tenant moves out/be evicted.

I'd suggest to get a PM in there regardless of what you intend to do with it. And I would add that you really need to get a professional PM, not just Hubby's sister. A PM is a very difficult job & unless your Hubby's sister is qualified, you are just putting yourself at risk. Also note, that friends/family really don't mix well with money/investing, sometimes the risks are just too great.

 

[ggumpshots]

Welcome to my nightmare.

How long are you prepared to wait for a better market.

What could you do with funds in terms of the Australian market.

What Northern Ireland tax consequences follow upon sale , given you are a citizen, but a non resident.You need to thoroughly understand tax law and how it will also or may afffect your Australian Tax.

If you can sell, then do so, but don't be greedy about the price . You can expect more problems for sure without being able to really influence matters much.