With our impending move half way across the world, we’re trying to decide whether we should rent out our home!

The advice of most friends and family is to keep the house and rent it out.

Mr Way’s instinct is rather different with the temptation being to sell up and start afresh.

We write this article in the hope that it aligns our thought and helps our decision making, but also in the hope that some of you might have some advice to pass on!

The Finances

Here’s a summary of how the finances look on our home, to give an idea of how it could all work.

House Value – £220,000

Outstanding Mortgage – £80,000

Minimum But-to-let Deposit – £55,000

Rental Value – £1,000 pcm

Becoming Landlords

When we first learnt of the FIRE movement and started optimising our finances, it was our original aim to own at least 1 rental property. We were fully on board with the Rich Dad, Poor Dad philosophy and even went to one of their ‘property lectures’. In the time since, we have become much more focussed on the stock market, but moving overseas has made us reconsider our options.

There are many positive reasons to rent out our home, some of which we’ve tried to summarise below:

Keeping an investment in UK property – it is our intention (although this may change) to come back to live in the UK at some point in the future. This will allow us to somewhat keep up with any growth in the housing market to give us a deposit on a new home.

Rental income – as you can see above, the numbers work fairly well and should give us a reasonable income all things being well.

Somewhere to come back to – if needed, we have the option to evict any tenants and move back into our home. This could come in handy in the event we need to make a swift return to the UK.

Still able to withdraw some cash – buy to let mortgages need a minimum 25% deposit. We currently have around 60% equity, meaning we could take out around £80k and still keep the house to rent out.

Sell It and Move On

On the other hand, there are many positives to selling the house.

We would come away with in the region of £140,000, to do with as we wish. This in itself would be somewhat of a problem, as we would no longer have access to ISAs etc. We would probably want to keep a large chunk of this money easily accessible to allow for a future house deposit. But a nice problem to have!

One of the major benefits to selling up is not having the worry of owning a property. There are many potential risks, including:

• Vacancy – no income because we can find a tenant / tenancies have a gap between
• Bad tenant – damaged property or even high court proceedings to remove them
• General wear and tear – if something major goes wrong, our profits suddenly get wiped out (think new boiler, new roof, water leak etc)
• Increase in interest rates without rent increasing to match – this would swing the numbers significantly. We’re at record low interest rates and Governments have been pumping significant money into the economy over recent years, so this seems like a significant risk.

Emotional factors – this is a big issue for Miss Way. We have many memories in this house, including Baby Way being born in the bathroom!! It could be difficult to know someone else is living in our house and using our furniture etc, especially if they end up treating it badly.

Any Advice?

This is where we find ourselves. We need to make a decision fairly quickly, with only around 3 months until we move.

What would you do? Should we rent out our home?!