Renting Out, Traveling On: A Homeowner's Odyssey

Renting out your house while you travel the world can be a great way to cover the costs of your mortgage or rent. However, it's not a decision to be taken lightly. There are several factors to consider, such as whether you have permission from your landlord or mortgage lender to sublet, the potential for damage to your property, and the need to hire a property manager to handle tenant needs. Trusting someone else to live in your home can be difficult, and you'll need to set clear rules and decide what to do with your possessions. On the other hand, leaving your house vacant for an extended period could make it a target for burglars or vandals. Additionally, you'll need to be prepared for unexpected costs and choose your tenants carefully. Overall, while there are benefits to renting out your home while you travel, it's important to carefully weigh the advantages and disadvantages before making a decision.

Renting out your house can help cover the cost of your mortgage or rent

Renting out your house can be a great way to help cover the cost of your mortgage or rent. This is especially true if you're travelling or relocating for a short period and plan on moving back into the property in the future.

If you're renting, subletting to a tenant or lodger can be a good way to ensure a steady income to cover your rent while you're away. However, you'll need to get permission from your landlord first, and they'll likely want to be part of the tenant selection process.

If you own your home, renting it out can help you cover your mortgage payments. This is a good option if you need to move away temporarily but plan to move back in later, or if you're an empty nester who wants to downsize but keep the family home. It's also a good option if you can't afford your mortgage payments but can find somewhere cheaper to rent.

However, there are some things to keep in mind. If you have a mortgage, you'll need to check that your lender is happy for you to rent out your home temporarily. You'll also need to consider whether you want to keep your possessions in the home, and set clear rules for your tenants. You'll also need to be prepared for repairs and maintenance, as tenants can be harder on a home than owner-occupants.

If you're going to be away while renting out your home, it's a good idea to hire a property manager to deal with any issues that arise. You should also put aside money each month for repairs and maintenance, as these costs can add up.

Overall, renting out your home can be a helpful way to cover the cost of your mortgage or rent, especially if you plan to move back in eventually. However, there are some drawbacks and extra costs to consider, so it's important to do your research and plan carefully.

You will need permission from your landlord or mortgage lender to rent out your home

Renting out your home while you travel the world is a great way to cover the costs of your mortgage or rent. However, before you start packing your bags, there are a few important things you need to take care of, and one of the most crucial is getting the necessary permissions. If you're a tenant yourself, you will need to get permission from your landlord before subletting to someone else. Most landlords may not be comfortable with the idea of subletting and may want to be involved in the tenant selection process. On the other hand, if you're a homeowner with a mortgage, you must get consent from your mortgage lender.

Mortgage agreements are binding contracts with specific clauses outlining the intended use of your property. Usually, when you secure a mortgage, it's under the agreement that the property will be your primary residence. Renting out your home is considered a change in the property's use and could violate the terms of your mortgage agreement. Deviating from this agreement without consent can lead to serious consequences, including increased interest rates, foreclosure, or even legal action. Lenders view rental properties as having a higher risk of default compared to primary residences, and by misrepresenting your home as a primary residence, you are accessing lower rates that do not accurately reflect this risk. Therefore, it is essential to be transparent with your lender and obtain their permission before renting out your property.

The good news is that many lenders will grant you permission to rent out your property, especially if you plan to return after a certain period. This permission is called "Consent to Let" and allows homeowners to lease their properties for a designated time. However, this consent usually comes with some changes to your mortgage terms, such as an increase in the interest rate, to reflect the higher risk associated with rental properties. The consent is also typically time-bound and requires renewal after a specified period, which may involve administrative fees.

To obtain consent to let, you should contact your mortgage lender directly. Each lender's process is slightly different, but they will discuss your options and guide you through the necessary steps. Remember, maintaining open and transparent communication with your lender is crucial to ensuring a smooth and compliant rental process.

You will need to hire a property manager to deal with tenant needs while you're away

Renting out your home while you travel the world can be a great way to cover the costs of your mortgage or rent. However, it's not without its challenges. One of the biggest considerations is whether you will be able to manage the property yourself or if you will need to hire a property manager. Here are some things to keep in mind that will help you make that decision:

The Role of a Property Manager

A property manager is a third party, usually a professional or a management company, hired by the landlord or property owner to oversee and manage the day-to-day operations of their rental property. They act as a local presence for out-of-town owners and are responsible for handling tenant relations, maintenance requests, filling vacant units, and collecting rent, among other tasks.

Benefits of Hiring a Property Manager

There are several advantages to hiring a property manager:

• They can act as a local presence and handle day-to-day operations if you are travelling or living out of town.
• They are experts in their field and are knowledgeable about landlord-tenant laws and regulations, which can help you avoid potential legal issues.
• They can handle tenant screening, maintenance requests, and other operational tasks, saving you time and effort.
• They can help eliminate the financial loss of vacant units by quickly filling them with new tenants.
• They can handle delinquent payments, collections, and evictions, saving you time and money.

Drawbacks of Hiring a Property Manager

There are also some potential disadvantages to consider:

• Property management services are not free, and you will likely be charged multiple fees, including a percentage of the property's monthly rental income, which can be costly.
• You will need to relinquish some direct control over the property and how things are done, which may be difficult for some landlords.
• Property managers may have different standards than you when it comes to tenant screening and maintenance, which could result in issues if they are not properly aligned with your expectations.

Factors to Consider When Hiring a Property Manager

When deciding whether to hire a property manager, there are several factors to keep in mind:

• The cost of their services—shop around and compare prices, but remember that you often get what you pay for.
• Their experience and knowledge—make sure they are registered, licensed, and have adequate experience in property management and knowledge of the local area.
• Their approach and professionalism—ensure they present themselves well and have a good track record of dealing with people.
• The services included—understand what services are included in their fees and what additional costs you may incur.
• Their communication methods—ensure they are comfortable with communicating via email and keeping you informed while you are away.

Hiring a property manager can be a great solution for landlords who want to rent out their property while travelling the world. They can handle the day-to-day operations, deal with tenant needs, and ensure your property is well-maintained. However, it is important to carefully consider the benefits and drawbacks, compare different property managers, and ensure you are comfortable with relinquishing some control over your property.

You may need to pay for self-storage to keep your possessions safe

Renting out your home while you travel the world can be a great way to cover the cost of your rent or mortgage. However, it can be challenging to let someone else live in your home, especially when it comes to deciding what to do with your possessions. One option is to move your possessions into self-storage, but this will come at a cost.

Self-Storage Fees

Self-storage fees can vary, and you don't want to be paying too much per month. However, it is important to consider the benefits of self-storage. If you visit the same place frequently, storing your possessions in a self-storage unit can reduce the amount you need to pack each time. This way, your items are conveniently located whenever you return.

Security

Self-storage can also provide a safe space to store your items while you are away. This is particularly important if you are leaving your home vacant for long periods, as it could be a target for burglars or vandals. By renting a self-storage unit, you can protect your personal belongings and have peace of mind while you travel.

Convenience

Renting a self-storage unit near your home or vacation destination can also alleviate how much you need to pack for your trip. This is especially useful for business travellers who need to access important documents and materials while on the job. With self-storage, you can travel stress-free, knowing that you have all the essentials you need.

Flexibility

Another advantage of self-storage is the flexibility it offers. Most self-storage facilities offer month-to-month agreements, so you can rent a unit for as long as you need. This is ideal if you are travelling for an extended period or if you are unsure how long your trip will last.

Protection

Self-storage can also help protect your temperature-sensitive items. If you have items that need to be stored in a controlled environment, self-storage facilities can provide the necessary climate control to keep your items in optimal condition.

In conclusion, while renting your home and travelling the world can be exciting, it is important to consider the practicalities, such as what to do with your possessions. Self-storage can be a convenient and secure option, but it is essential to weigh the costs and benefits before making a decision.

You will need to prepare your property for rental, ensuring it meets safety standards

Preparing your property for rental involves several steps to ensure it meets safety standards and is attractive to potential tenants. Here are some key things to consider:

Security

Ensure your property provides adequate security to enable tenants to obtain contents insurance for their personal items. Check that all locks are secure and operate effectively with keys. Provide your property manager with several sets of keys, including those for window locks, the garage, garden sheds, and the letterbox.

Maintenance and Repairs

Address any general repairs and safety issues. Ensure that all windows and doors, including cupboard doors, open and close easily. Make sure that all locks and keys are fully functional. If your property has a swimming pool, it must be secure, child-safe, and compliant with pool safety standards. Keep appliances left at the property for tenant use in working condition and provide copies of manuals and warranties.

Cleanliness

Arrange for professional carpet cleaning and a pre-tenancy clean to ensure the property is in a good state before tenants move in. This sets a standard for the condition in which tenants should return the property at the end of their tenancy.

Safety Equipment and Systems

Install the necessary safety equipment, such as smoke alarms and fire extinguishers, and ensure they are in proper working condition. Conduct regular maintenance and inspections of this equipment to maintain tenant safety.

Compliance with Regulations

Familiarize yourself with local regulations and ensure your property complies with building, health, and safety laws. For example, in Western Australia, landlords are required to have two safety switches (RCDs) and smoke alarms installed to Australian standards.

Emergency Response Plan

Develop an Emergency Response Plan (ERP) to outline procedures and actions to be taken during emergencies, such as natural disasters or technical outages. This plan should include communication procedures, assigned roles and responsibilities, evacuation routes, and life-saving protocols.

By preparing your property thoroughly and ensuring it meets safety standards, you can provide a safe and attractive rental option for potential tenants while also protecting your investment.

Frequently asked questions