daveyminto

Looking to move to NZ to work as Social Worker, so should be no problem for work. I want to sell our house here, my Wife wants to rent it out. Whats best?
Sounds like lack of commitment to me, common sense alternative plan to her.

Any info on this or Social Work much appreciated. Cant find wages for these jobs.

David

dlummis

i had same disscussion with my wife and both decided to sell as last thing we want is 1; easy way out when things get tuff and they will at one point, 2;cant sell house if tennants are not willing to shift as you now law in uk is crap and no matter how many solicitors you have they wont shift, and another point we want money in the bank so when we see the house of our dreams we can buy it straight away.
hope this helps
darryn

lapsed kiwi

We've just been through the same decision process. After some research, we found that rental income was unlikely to cover mortagage+insurance+etc, and that despite us owning more than 50% equity. Some other points about renting:
- It means if you buy in NZ you'll have two mortgages. If you lose your tenants and/or the house is unrentable for any period, you could be up the creek fast
- Remember, any income in UK is taxable in NZ. I'm not sure if you can offset property expenses against this, but it is likely to increase your tax bill if you have rental income
We have put our house on the market, and provided we can get a good price, look forward to being mortgage-free in NZ

dlummis

yes totally agree some very good points and as you put it as soon as i get there i will be morgage free too. so then you are not worried about working overtime to pay bills, cant wait.

Roger

If we had rented our house in the Uk we could not have afforded the mortgage (£1000/month) if it was not tenanted.

It is too easy to go back without giving it a real try.

Our house in the Uk is still worth the same, however our Kiwi house is worth 40% more. Okay the markets are changing all the time though.

Friends had a nightmare with their house in the Uk. They spent a fortune doing it up for rent (couldn't get my head around that though). First tenant made them buy carpets and do garden landscaping then left very early. Second tenants relationship broke up, went into debt, left the house without paying bills, then the folk he owed also broke in and snatched all that he left including their stuff. They only found out as a parent drove past and saw it almost desolate!! Of course it wasn't the agents fault, who then did not find a further tenant. Needless to say it caused a massive amount of stress and our friends had to go back to sort it out, and are yet to return.

Immigrating is very stressful. You could do without the added heartache about worrying about a house in the UK.

dlummis

this has made my mind up i will not be leaving uk until my house is sold

Sally1

We have had the same dilema. We actually need to sell our house to have any kind of funds to get us to NZ in the first place. My father who always has good advice thinks we should rent our house out here, mainly because if it doesn't work out you have a step on the property ladder back in the UK if you return. Personally, I don't want the stress of keeping it rented out and also think that the rental income will not cover the mortgage. The last thing I want when in NZ is to worry about stuff back in the UK as you can never really move on and settle. Having read the advice here, I have taken the decision to sell up. Unfortunately, I wont be as lucky as some, only coming out with approx £45,000 so will not be mortgage free, but it's a start. Is there anyone out there that thinks that I don't have enough money to be able to make a go of it? I work in the Pharma Industry - Customer Services (no major qualifications, just experienced hard working employee) and my husband is a fruit and veg market trader in the UK, but is prepared to do anything to change his career and get a foot in the door elsewhere - hammer hand or farm work. Any advice would be appreciated. Thanks.

daveyminto

I can see where everyone is coming from, although our circumstances are a little different. I have a low mortgage so rent would cover it Ok, although I agree with the probs of tenants etc. We will have a little cash (@16k) as a backup to go with. My main worry is the level of income. I cant find any detais of SOical Work wages and so am waiting for a friend who has a friend etc etc. All in all still concerning. The other thing I cant believe is how some of the posts on this site set my mind racing from move now to dont even think about it. Someone tell me what to do so I can blame them when it all goes wrong either way

David

javajive

David,

Several points,

1. Need to factor in how you think the housing market is going to go - I'm sure you are aware that this year is different to the last 5-7 years of steep increases. Therefore if you don't sell now and then need the funds you may be a forced seller and remote with a house that is not well presented because it has been knocked about by tenants with prices crashing and no buyers.

2. The true way to look at income is the yield of current rental income divided by the CURRENT HOUSE VALUE. Not the what you bought it for or what mortgage you have.

3. Consider what income you can generate by just putting the proceeds of your house sale in a high interest bank account (NZ has higher interest rates, but you need to factor in tax, where you would want the money, the relatively high NZ dollar FX rate and tax) - you could hedge your bets and do a little of each....

My personal view is that I would try to sell now, if it doesn't sell then you can rent it out as plan B. I don't think prices are going to increase in the UK and if you ever want a UK BTL investment / backup place for the future you can come bargin hunting in a year or two. Income from banks should beat the type of yield you can get once you take into account management fees, voids, maintaince, insurance and risk.

I can understand your wife wanting to keep a little bit of Blighty - but I would take the money and run now and then do that in a year or two once the housing market returns to something more normal. The saving might pay for your trip several times over....

Don

The UK housing mkt is cyclical, ie there are periods when the ratio of average house prices to average earnings moves above or below the norm. See http://www.housepricecrash.co.uk/hou...ash-graphs.htm . in the last 50 years the ratio has ALWAYS come back to norm and there is no intelligent reason to imagine that this time will be different, ie house prices are due to fall, IMHO about -30% in real terms over the next couple of years.

Gross income, yes: but many people would look at total return, ie net income, plus (anticipated) capital gains or losses.

There are good tax reasons to also consider investing in a BTL in NZ as part of your portfolio if you pay NZ income tax - there are plenty of tax concessions.

IMHO I would sell UK property now, keep the equity in a variety of investments and currencies, but rent rather than buy in NZ for the time being. My rationale: I think UK house prices will fall significantly, I think NZD will weaken against the GBP (say, 10-15% over the next couple of years), I think NZ house prices will fall (say, 10% in real terms over the next couple of years).

Agreed.

Roger

I think that Don's advice is solid in this case. If we had come without the money from our house sale we could have never got on the ladder here, and would have lived a very frugal existence.

We are currently selling our house in Hawkes Bay and plan to rent for a while (no reflection on HB as it a great place, but there are other challenges in NZ for us). NZ prices aren't accelerating away as was the case the past three years IMHO. We'll really suss out the next region we go to before investing our hard earned cash.

Roger

Gill and Rob

As far as I am aware, Social Work salaries are in the range $34,000 for newly qualified to about $44-46,000 for senior staff. This is for a DHB, District Health Board.

Gill