When it doesn't make sense to rent out a house.

[rugrat]

DH has applied for a couple of postings elsewhere (think small tropical islands ), which is very exciting. It would be 12 months, after which we would return. DH work would be paying for our accomodation costs wherever the posting is.

I initally just assumed we would rent out this house 'if' this seachange actually happens, however after a quick run through of the figures I have realised that it would actually make way more sense to simply leave the place with a housesitter (probably one of my baby sisters).

It seems strange that this would be the case. This would be a positively geared property if rented out. But we would then need to put everything in storage, which involves the cost of moving everything and the actual storage costs (which aren't all that cheap). Relocation of funiture isn't really a viable option as the costs involved in just getting it there would possibly exceed the cost of the funiture.

It would mean rehoming our animals, or finding somewhere to board them long term, or taking them with us. The first option isn't really an option to me, and the two second options are VERY $$$ - just to be repeated once we return in 12 months.


This seachange is more about personal preference and experience then anything else. But it has just surprised me that it is actually more cost effective to leave a housesitter to live here rent free (sister would just pay her own bills) and look after our pets, then it would be to vacate and generate an income from the premises.

It just goes to show that what seems like the obvious answer, just very well may not be.

 

[Aaron Sice]

thanks for that - i guess the bonus is that your accomodation for your move is paid for, otherwise renting out to get some return back would be required.

it's always expensive to move, but kudos for stepping back and seeing the bigger picture.

i'd make the sister pay the utilities and cover at least your rates while you were away, though. although if the mortgage is below market rent, there's no gripe

 

[chrispy]

I found the same thing when I went to work in Geneva.

I needed someone to fax through the bills for the properties and the PPOR, so I could continue to pay them online, plus I wanted someone to make sure my garden was watered plus a miriad of other bits and pieces.

I was not away as long but did it a number of times, so found someone who was back living with his mother for finance reasons and who was willing to come and go as required.

Good luck with your new island experience

Chris

 

[marg4000]

I agree that for 12 months it would not be worth the hassle, especially as you have a family member you can trust to mind everything for you. It will also be convenient for you should you come "home" for holidays while on the posting.
Marg

 

[tom32]

Must be in a different industry to me.

A 1 month posting could easily be a several months and a 12 month posting could end up turning into several years.

At least if you rent the place out you can take advantage of any extension to his posting, assuming there is a risk of this?

Why don't you rent it out but tell the agent you will only take very good tenants, be fussy on who can rent it for piece of mind, only references from same agent even perhaps? Sounds like you don't mind it if it goes untenanted for a month or two?

You would be kicking yourself if in 12months it gets extended and over a few years the advantage of getting rent paid will be material compared to moving costs.

Also I quite enjoy unpacking into a home. You can get things organised for at least a few months! You would have all that to look forward to on your return.

 

[RumpledElf]

They are paying your rent - check the fine print, often you get an allowance to have your stuff moved too.

I hear it is very cool for some moving company to swoop in and pack all your stuff up for you.

Don't think they pay to move it back though, and being an island ... maybe not. But it never hurts to ask!

 

[rugrat]

RE - No they will pay relocation OR accomodation not both. accomodation is fully furnished. Since it is only 12mths (less for me seeing as I won't move up straight away) not worth relocating.

 

[rugrat]

It can only be extended at our request. It is a public service position. If we hate it for any reason and want to move back, we can. But the sceening is pretty in depth as they try to avoid that. Fingers crossed he gets one of the positions.

 

[Dazz]

It just goes to show that what seems like the obvious answer, just very well may not be.

"Obvious" is always dictated by your underlying expectations.


My underlying expectations as I was reading your story unfolding were ;

• The Landlord of the storage facility will charge a proper rent.
• The Business owner of the storage facility will charge a proper rate.
• The Business owner of the moving company will charge a proper rate.
• The Landlord of the boarding kennel will charge a proper fee.
• The Landlord of the house to be rented will be forced to give it away.

The conclusion you drew seems perfectly obvious to me.

 

[oracle]

It seems strange that this would be the case. This would be a positively geared property if rented out. But we would then need to put everything in storage, which involves the cost of moving everything and the actual storage costs (which aren't all that cheap). Relocation of funiture isn't really a viable option as the costs involved in just getting it there would possibly exceed the cost of the funiture.

Why can't you rent it fully furnished and charge extra rent for fully furnishing?

Cheers,
Oracle.

 

[rugrat]

Why can't you rent it fully furnished and charge extra rent for fully furnishing?

Cheers,
Oracle.

Besides the fact that I don't want to have to deal with the whole renting out a furnished property:

- we have ALOT of different funiture. Some items old and beaten up, leftovers from uni; some new and in good condition, we wouldn't want in the hands of a tenant.

- we would also be leaving alot of other things behind that you wouldn't want to leave in a tenanted house, but which we don't want to take with us. ie, clothing, linen, photo's, cot, bassinet, baby funiture, camping gear, car, tramopline, swings, etc.

- the tenants our house would attract would be young families (entry level 3 bedder) who would have their own funiture.

Plus, then we still have the dilemna of the animals - 2 dogs and 2 cats; Taking with us is not possible to at least one of the potiential places, and prohibitively expensive for the other two - particularly considering we would have to then pay to relocate back at the end of the 12 months.

 

[craigb]

RR you guys know how out of the box i think so try this one on for size.
you want the furniture to stay, and the animals cared for , what about you ask your sister or good freind to sit the house for free, this will enable them to save their money for their own house in 12 months time, But all we want you to do is rent the other two/three rooms out , collect the rent ie 200<300 perweek and pay the utilities, and bank the rest for us, to use when we return, but you have to get the sell right,

ps thats about $13,000 a year that could go on the next ip

 

[RumpledElf]

- we have ALOT of different funiture. Some items old and beaten up, leftovers from uni; some new and in good condition, we wouldn't want in the hands of a tenant.

Same here but different situation - the older and smaller stuff stays in the old house, the new stuff comes with us, and we top up the difference in both houses. But our house/area is likely to attract single workers, and we're only moving next door. And relocating the pets? We just have to throw the cat over the fence.

Get that housesitter in!

 

[Intrinsic_Value]

at the end of the day it depends on the quality of the house, the quality of the furnishings and the suburb.

A friend is looking at travelling europe for the next 6-12 months
They have nice house in a reasonably upmarket suburb (mt Eliza vic).
They have been offerred $1000 a week through a corporate listing (apparently a senior executive at myer is interested).

Its still not a great return (roughly 3.5%), in fact its pretty p**s poor, but i dont know what the 'end payer' is paying (ie whats the middlemans cut). So although the % is not great, the $ are reasonable.

 

[FormerLurker]

Subsidise rent

Why not rent it out to friends/family at a greatly reduced rate so they can look after the house/furniture/animals?

That way you get $100/week or something and the place/animals looked after and they get a far cheaper than market place to live in?

win-win and beats no $ incoming .

 

[Deena]

Go the house sitter, Hoping it all happens for you, what an experience it will be.

 

[Indifference]

Go the house sitter, Hoping it all happens for you, what an experience it will be.

Ditto....

Everything in life doesn't need to be overcomplicated... Peace of mind has value too! Besides, it's your home and pets, not just a box with windows.

Sounds like a wonderful opportunity and life experience. Good Luck!

 

[Deltaberry]

Why would you rent a house when you can squat... quick story I heard the other day

a) Rich HK woman with some houses in St Kilda, Melbourne

b) She left them vacant

c) Squatters entered, got water/electricity connected under their names

d) Mum’s friend (ie the landlord) finds out a year later and tries to remove the squatters

e) Legal advice was it’d take over half a year because the squatters had ‘adversely possessed’ her land or whatever, and they’re paying electricity bills

f) In the mean time these squatters are psycho lefty greenie union-supporting artsy film makers

g) They leave their film making equipment on the curb

h) Council fines this friend of mum’s $5,000 twice for leaving this equipment on the curb

i) Mum’s friend (ie landlord) can’t recoup the losses from the squatters because they are psycho lefty greenie union-supporting artsy film makers with no money

j) Council refuses to revoke fines…

k) One day mum’s friend got someone to go into the house (when the squatters weren’t around) and pulled up all the floorboards so there was no more floors in the house

l) Squatters left

It's all good though, she gave the film makers a fair go. "Onya mate!!"

 

[wylie]

What would have happened if the landlord friends entered when the squatters were not there and took everything out?

Did the squatters have to leave of their own volition, giving up their "legal" rights to squat?

Could leaving the floorboards intact, but removing the squatters belongings and changing the locks have worked?

 

[Deltaberry]

Not sure. I'd imagine they'd be able to sue you for theft, invasion of privacy and perhaps trespass (since after all they're 'squatting' which is probably a legal form of occupation). Of course the landlord should have to bear all this risk because after all, we live in a communist, oh I mean democratic society.