mancity

Anybody renting there house in UK, while living in Aus.

Whats the pros and cons?

Has it worked out well?

Be an interesting one, to hear, as I see alot of people selling up , which I did once but then regreted.

Grayling

Bear in mind that you will be liable for Australian tax on the rental income.....there are ways to minimise it but that depends on circumstances.

G

mancity

I am aware,

my question is on that subject say I have to put towards the mortgage, approx $6000 a year, can I claim this as a loss with the ATO and get negative gearing.

I presume I am liable for capital gains in the future, if i sell it.

Or is that only for Aus investments?

stu:0

Im about to rent mine out, we go in june but plan to sell once we are 100% sure oz is for us plus we are on sponsership and if anything was to go wrong with katys job and she lost it were kicked out of oz and at least the house would be there to come back to. We plan to go for pr after 6 months.

Stu

mancity

Spent 18 months there, came back for god knows what reason, but things happen for a reason I guess.

Anyway I am ping ponging my ass back there, personally I see alot of pommes make a house a priority there,

My experience is settling down is the main priority a house justs adds to the stress, beleive me I went through all that, the only thing is, unsettle me as my job was complete toss, and I couldnt see the wood for the trees.

YvonnePaul

We'd also be interested to hear about the pros and cons of this. We are hoping to get to Oz on a temp visa and so feel it would be stupid of us to sell up before going. We are giving it two years over there before making up our minds if Oz is for us or not and so will also rent a house in Oz rather than buy. We plan to go for an interest only mortgage for our own house for the two years - any "cons" with this??

We don't really have the cash to go through a rental agency who take 10-12% of your rental income as their fee every month so might go down the route of just drawing up a contract with a lawyer.

I'm finding this a very difficult situation to understand - money and the law seem to baffle me pretty easily! So if anyone has any advice or (100% correct) information it would be gladly received.

stu:0

Im doin the same as you, going onto intreset only. The only con i see in it is that your nor paying anything off you mortgage. But if you bank all the proffit each month and dont touch it you could pay that off the mortgage at the end of the year also its a little pot of money ready if anything goes wrong with the house. Im also looking to just use an agent just to find someone and the brother in law said he would play middle man and keep a check on it so it will just be a contract with a lawyer for me to. Only thing i would say is make sure you tell the tax man what your doing you need a non resident landlords for and chances are you wont pay any tax on what you make if you have no other uk income

Stu

Grayling

That is fine as far as UK tax is involved but you are still liable for Australian tax. That can account for nearly half your rental income unless you plan it properly.

You are liable for this tax whether you leave the money in the UK or not as it is your worldwide income that is taxed.

G

Grayling

The rules are different for temporary visa holders.

G

beyondblue

Hi
We have kept our house in UK, and have long term tenants in. We make a rental income that covers the mortgage repayment and gives us £500 per month clear.
As we are temp at the moment in Oz, we get LAFHA, which works out well. We are currently going through the PR process, and will sell our house when we get PR AND when we decide whether we stay in Oz long term or not.

Some people have said that keeping the house in the UK doesn't help with the initial settling process- and I have to say I agree with this to a certain extent- although its hard to generalise in this instance.

It has been the best thing for us, to date, so if that is what you have decided to do, then good on ya mate!!!

BTW, we have a rental company who provide a landlord service looking after the house in the UK, and they are excellent [so far].

mancity

You have long term tennants. this is something i would like to achieve.

And with a agent who looks after eveything, without phoning every 5 minutes.

Maybe a lot to ask but its the way I would like it.

Where abouts are you in UK?

h2oskineil

We have taken out 'Rent insurance' to cover the rent should the tenant not be able to pay. Even the very best tenant could become ill or loose their job. We used www.letsure.co.uk and took out the Rentsure Silver Policy It cost about £300 per year, but we get £650 per month in rent and so felt it was a reasonable cost.
The policy will pay your rent until you get vacant possesion and will pay 100% up to £5000 per month.

Get a good agent to look after the property, in our opinion it is well worth the small amount each month it will cost.

Also we took out British Gas Homecare 400 cover which is £23.25 per month. I there is a problem with the central heating, plumbing, drains or electric they will come out and sort the problem (for free). We just had the central heating control timer replaced the hot water tank was changed last year.... well worth the monthly fee!
https://www.britishgas.biz/

Neil.

suzimc

I would agree with that - my husband has found it hard to leave our old life behind in his head, and on more than one occasion we have discussed selling the UK property (even though it makes far more financial sense to keep it for now) just to help him settle. We are still considering selling our flat in the Uk and buying another one over there as an investment property, just so that it won't be 'home' in his head any more. I, on the other hand, haven't found this a problem at all, I feel like I have moved on from it and don't ever see us returning to live there, even if we do go back to the UK one day, maybe it's bwecause I moved around a lot as a child or something.

My biggest comment about doing this though, is to make sure you get good tenants, even if you have to turn down the first interested party. Our first six months were highly stressful thanks to terrible tenants who upset all our neighbours and wrecked the flat. We kicked them out as soon as the 6 month lease was up and their whole deposit and more was used to put the place right. Now we have fantastic tenants in there and it's all a breeze. We don't make anything financially - the rent covers the mortgage and a few incidentals in the flat, but all the time the property value is increasing.

We also found out that offering a cleaner as part of the package (you can't insist on this though) was a great way to ensure that the place is looked after. We have ouor neighbour managing the property and this again I highly recommend because she is always there if there's a problem and it's in her best interest to make sure all is well too.

There have been several previous threads about renting out UK property on here so it's probably worth doing a search too...

Suzi

beyondblue

Its funny you should say that Suzi, as I have the same issue with my husband. He misses our 'home', which is suprising, because you would think it would be the woman!!
We also provided a cleaner and gardner, and fortunately have some lovely tenants, although when they eventually move on, we will have to make a decision whether to re-let or sell. We were advised to provide 'services' as its just another means of ensuring that maintenance is being carried out to keep the property in a dcent condition.
I have heard some negative stories, and realise that it could go pear shaped for us, but at least at the moment, by keeping the house, we are able to look around and determine potential areas that we want to live in [and can afford] in Australia, without too much pressure.
Also, as we are temp at the moment, we have the back up should anything go wrong with jobs etc .

hedgehog-girl

Get in touch with a financial advisor as if you have to put money towards your mortgage back home you will find that you are eligible for some tax rebate. A lot of people are doing this now but you need to seek advice.