Relocating is one of the most exciting things that you will ever do, although it is also challenging and demanding in equal measure. After all, the logistical requirements and need to absorb a new language or culture can take their toll on individuals, whether you are a single home-owner or somebody with a family to support. The emotional pull of your homeland can also be compelling, making it even harder to organise your move and execute clear decisions.
Whether you are inspired by this, have the desire to maintain a security net in your country of origin or simply wish to retain your existing home as an investment asset, however, it is tempting to maintain ties with your homeland when relocating. This also brings its own unique challenges; however, as the process of managing property from overseas and maintaining its profitability can be difficult. This is especially true if you are new to buy-to-let investment, which continues to thrive in 2015.
The Challenges of Relocation: How to Manage a Rental Property from Abroad
As a starting point, it is worth reaffirming that the standard features of letting a property remain that same regardless of international boundaries. You will need to uphold your responsibilities as a landlord, for example, while also maintaining compliance with the relevant, national laws. You will also need to source viable and tailored insurance coverage, which is relevant to the buy-to-let market and capable of protecting your investment.
Beyond this, however, what practical steps can you take to manage a rental property from abroad? Consider the following: –
Create a Management Infrastructure
When living overseas, it is clear that you cannot hope to manage your rental property in person. While this is far from ideal, it can be overcome with a viable and clear defined management infrastructure. The most ideal option is to partner with a property management firm in your country of birth, which will bring in tenants, oversee planned and unscheduled maintenance works and even manage rental payments.
These firms usually charge a fixed percentage of the monthly rental cost, however, so this may not be viable for lower value properties. The next option is to leave the management duties to a trusted friend or family member. Bear in mind that this can place a strain on any relationship and you will need to communicate clearly with one another if you are to succeed. It would also be wise to source a suitable tenant on a long-term agreement before you leave, as this will simplify the process and develop a secure foundation.
Whichever option you choose, create clearly defined processes and communicate these openly before an agreement is put into place.
Manage your Bills through Direct Debits
While your property management firm will handle the collection and management of rental payments, it is still your duty to meet mortgage repayments, pay stamp duty and settle any taxations requirements for the properties that you own. The only issue with this is that the companies that oversee these are likely to be based in your homeland, making it more difficult to transfer funds and communicate on a regular basis.
A simply way to overcome this is to establish a Direct Debit for any recurring payments that need to be paid in respect of your overseas rental property. This payment method is now available in a high volume of developed and developing economies, meaning that is more accessible. It is also easy and requires no direct management, other than checking your monthly bank statements to ensure that the money has been repaid.
You can hire an additional service provider to handle this on your behalf if it is not possible to pay by Direct Debit, although once again this will require a fixed processing fee.
Keep an eye on Real Estate Growth Trends and Forecasts
Ultimately, your circumstances will change as you live as an ex-pat for a concerted period of time. This will mean that the comfort provided by owning real-estate in your country of origin may no longer be required, meaning that you should treat the property solely as an investment asset. This will alter your way of thinking entirely, while also forcing you to adopt a more proactive outlook towards managing your asset class and making progressive future plans.
With this in mind, it is imperative that you evaluate real estate growth trends and forecasts on a regular basis. This applies to both broad trends and those relevant to the specific region where your house resides, as this can provide you with genuine insight and enable you to make informed decisions. Take the current real estate market in the UK as an example, as this continues to exhibit inflated prices points and a genuine shortage of housing supply. This ultimately creates a sellers’ market, and one that may encourage you to sell your property for a considerable profit.
The decision is ultimately yours, but taking the time to monitor trends and forecasts will make it easier to make the most out of your asset.
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