Australia So Much to See

Some travellers sell their home to finance their home-on-the-road.  If you plan to travel long term and do not want to sell, other options may be to rent it out or if you do not trust tenants, leave it vacant with family or good friends keeping a close watch on it and perhaps staying in it periodically to satisfy your insurers. 

You may have specific reasons to want to return to that home, otherwise an option is to sell the home and purchase something more suited to renting out.  You will then have the security of real estate to sell to finance a new home purchase on your return, and any damage or wear and tear to that home with not have the same emotional impact on you as if it was done to your own long term home.  You will be able to choose to buy in a rental area where you can achieve a higher income to capital investment ratio than your own home.  At a pinch you could live in the property until a sale and purchase of something more suitable is achieved.    

If you choose to retain your present home and rent it out while you are travelling, be prepared to find undue wear and tear, and a house that needs a repaint and new curtains at the very least.  You will be paying tradesmen to do simple maintenance that you would have done yourself.  I would not like to rent out my own home other than to trusted family members.  In the latter case, you may also be able to keep your furniture and some of your possessions in the house. 

Despite your best efforts, things can go wrong, specially selected tenants can loose their job and fail to pay the rent before doing a runner interstate never to be found, and not many tenants will look after it as well as you do. 

If you do decide to rent, be very clear about what you want, choose a property manager with a good reputation in your area (even then, your manager may go on maternity leave and be replaced by someone not quite so good - that happened to us when we had an investment unit).  Ensure that the whole company has a good reputation. Discuss with them what maintenance bills you might expect, and think about the cost of a repainting job when you return, restoring your garden, replacing carpet that may get burn spots in it, etc which are wear and tear items you will have to bear.  You can also have the final say on the prospective tenants.  Specify no pets - they can always apply if they want to have a pet be it a goldfish or a poodle, and you can make a decision on the individual case. 

If the tenancy situation in your area results in vacancies, you may well have it vacant for a period of time anyway – so back to square one re insurance.  Never be totally reliant on rental income to pay a mortgage; a vacant house may ruin your travel plans.  Regardless, there will be additional maintenance costs for things you would do yourself when living at home.   

Whether you rent out your own home or a purchase rental property, discuss taxation and capital gains tax implications with a good taxation accountant first, so it is set up right both for the taxable rental income and valid deductions, particularly should you later want to sell the home.  This applies even if renting to family members. 

If you sell your home and plan to keep a nest egg, the money invested in other ways may be just as secure as real estate.  If in a worst case scenario where you may have purchased shares instead of real estate and these have crashed to a low value on your return, you can always rent something – or choose to continue living the nomadic lifestyle with your caravan or camper. 

Before selling your home to finance long term travel, you need to be certain that both partners will enjoy the lifestyle on a long term basis.  Many people do not. Think about what would happen in a case of ill health or even in the case of the death of one of you.  It has happened. 

For short term travel, house sitters can be an option, or again a family member; perhaps you have young adult grand children wanting to start out on their own, with their parents willing to oversee that they do the right thing.  House sitters can be found through various agencies but even with good references, you are moving into the unknown.  A network of friends or even through your local church may lead to someone willing to house sit for you.  Travel forums on the internet are opportunities to find other travellers who are living in their caravan and would like to live in a house occasionally, particularly if in a nice location.  You may be able to talk to others they have house sat for to check on their reliability. 

I have been a tenant, rented out property, used house sitters and have also worked in residential property management, so I have seen many things go wrong, horribly wrong.