Renting a UK property while overseas or just sell

splinters

So, I currently work in Zurich while my wife is in our property in the UK. She is joining me this summer and we don't really want to live in our house when we return despite having been there almost 30 years.
My daughter and husband don't like their house and want to save for a better property. We will be well paid in Zurich and considered letting them live in our property and rent theirs but they say they won't save much after paying their mortgage and tax on the income. They also need to change the mortgage type which will push up the payments.
We like the security of still having a property but at this point it looks like we rent or sell our house, or they move in and sell theirs.
Plan is to move back to the UK in 5 years and buy our retirement property with what we have saved (we are 56).
Any suggestions on the best options here. I realise the most lucrative is to rent our owned (mortgage free) property, but we would like to help our kids get on in life.

sheenas

If you not interested in being a landlord then don’t be one.  Its time consuming and low profit. If you want to help your children you can gift them money which directly helps with their issues. 

splinters

sheenas said:

If you not interested in being a landlord then don’t be one.  Its time consuming and low profit. If you want to help your children you can gift them money which directly helps with their issues. 

Thanks, but their issues are first world (wanting a bigger house) so would rather use our assets while we live abroad while instilling a sense of responsibility and money management in these relatively young people. I think a nice rent free furnished house (nearby and in a nicer neighbourhood) while they use their assets to make money, is better than just giving them money.

RAS

Do you fully understand the risks? Which country are you in, as all 4 have different rules.

Do you need to comply with the safety regulations that relate to tenancies? What happens if they wreck the house? Who pays for repairs? If they do, are you creating a tenancy you cannot terminate. Etc, etc.

What happens if their relationship breaks down and it's not your child resident in the house?

Emmia

splinters said:

sheenas said:

If you not interested in being a landlord then don’t be one.  Its time consuming and low profit. If you want to help your children you can gift them money which directly helps with their issues. 

Thanks, but their issues are first world (wanting a bigger house) so would rather use our assets while we live abroad while instilling a sense of responsibility and money management in these relatively young people. I think a nice rent free furnished house (nearby and in a nicer neighbourhood) while they use their assets to make money, is better than just giving them money.

If you don't want to return to the house sell it, and invest the proceeds so you've got a more liquid asset when you return and no landlord hassle in the meantime.

grumpy_codger

My 2 pence...
When living abroad you'll need a letting agent to manage your property. The agent will use every opportunity to fleece you when it comes to any repairs, minor or major. I don't  have any proofs, but I suspect they are all in cahoot with tradespeople and share the loot. Or tradespeople simply know that when dealing with a letting agent it's easy to take advantage of the fact that letting agents don't care.
My opinion is based on my elderly friend's experience. Most quotations I see are about 2 times overpriced compared to the price one can find if managing the property themselves. 

poseidon1

splinters said:

sheenas said:

If you not interested in being a landlord then don’t be one.  Its time consuming and low profit. If you want to help your children you can gift them money which directly helps with their issues. 

Thanks, but their issues are first world (wanting a bigger house) so would rather use our assets while we live abroad while instilling a sense of responsibility and money management in these relatively young people. I think a nice rent free furnished house (nearby and in a nicer neighbourhood) while they use their assets to make money, is better than just giving them money.

As I understand it you will let your child live rent free in your home until your return from a broad, on the basis they presumably sell their current home and save their current mortgage outgoings towards buying a better property in future?

However, putting aside the finer details of how this would actually work in practice, an obvious risk is your child may not have accumulated sufficient cash to purchase a better home than they already have, in the 5 year window you envisage.

Worse case you return in 5 years time ready to sell your home and move on, but your daughter  now possibly burdened with child/children of her own and plugged into your local community find that she is unable or unwilling to transition elsewhere with the funds she has been able to accumulate over the 5 years. 

 In this regard I note your reference to your house being in a nicer neighbourhood than where your daughter currently lives, so would you really be doing her favour if she gets accustomed to life on the better side of the 'rail tracks', only having to return to  a less salubrious area she can actually afford?

 Of course if she can amass sufficient resources to buy your home on your return, then presumably win win for the both you, but is that likely? Alternatively would you be prepared to sell to her at a discount?

elsien

grumpy_codger said:

My 2 pence...
When living abroad you'll need a letting agent to manage your property. The agent will use every opportunity to fleece you when it comes to any repairs, minor or major. I don't  have any proofs, but I suspect they are all in cahoot with tradespeople and share the loot. Or tradespeople simply know that when dealing with a letting agent it's easy to take advantage of the fact that letting agents don't care.
My opinion is based on my elderly friend's experience. Most quotations I see are about 2 times overpriced compared to the price one can find if managing the property themselves. 

You are extrapolating from one person’s experience to the whole of the letting and trade industries? 

splinters

Thanks for all the comments, they are invaluable. It feels like selling will be the best choice. It just feels strange not owning a home after all these years and is any job safe nowadays... Renting in Zurich is expensive, buying near impossible. Our dilemma now is getting the house on the market and cleared out by July while it's still inhabited and preparing for a wedding. Still real life eh. We had never thought of renting our own house before but it's hard to find anything positive about the idea.

mlz1413

I agree with selling your house, if your don't want to come back to it.

You could let your daughter live there for free if she pays the bills and looks after it, but Poseidon1 does set out a good argument not to and I definitely agree with that post.

You could make a contract with your daughter that she has to save her current mortgage value and has to have bought somewhere within the 5 years ... but again what would the reality be if she dipped into the savings for a car, holiday, etc.

If you do want to own somewhere, could you agree to buy the daughters house? Same deal as living in yours but you will own it and be coming back to it in 5 years.  That way daughter needs to be out but it gives you a breathing space to buy the perfect retirement home. Difference with this is you and daughter won't keep this house and it only betters her life by financial easing their current situation. 

Lastly I would not rent either house out. Being a reluctant landlord in the current changing landscape would be stressful and there is no guarantee tenants will leave (in today's rules let alone what is to come). 

Enjoy the wedding and Zurich, it sounds like quite an adventure!

splinters

One last question before we start the process of selling the house. Are there any practical options to keep the house at minimal cost to us while overseas? We like the flexibility of still having a property (visits home, fallback in case the jobs don't work out here etc.) but no one wants to be paying council tax, utilities etc. and we would need to have the property checked for leaks, damage etc. but our children live quite near to us.

I think I know the answer but, having never sold a property before, I thought it worth asking for some advice.

I guess that this will just be dead money (and unwanted costs) for the 'convenience' of a place to stay when we come home. Likely to reduce its value too if its left too long and isn't there a big tax hit if you sell a vacant property while overseas? We also really need to stop sentimentality creeping in :-)