To sell my house or not?

Hi,

It is looking more and more likely that I will be sent to London on a multi-year assignment for my company.  While I have no real hesitation about the move (I've lived as an expat in a few countries), I do kind of wonder whether or not I should sell my 'home' in the US before moving over, or keep it as a 'base' to come back to when the gig is up?

It's partially financial--I wouldn't be able to buy in the UK unless I cashed out the equity in the US and I do wonder about the bubble (in both countries).  My house in the US is waterfront property so with the exception of a hurricane or nuclear bomb, it is pretty insulated against a decline in property values.

The other part is kind of mental.  I've done some long assignments in the past (a few months in Russia, a year in Hong Kong) but always I had a 'home' to come back to.  In reflecting on those trips, I think we didn't really 'go native' as much as other expats because in the back of our mind there was always our 'home' back in the US that we would go back to.

This trip to the UK is going to be about 3-5 years I suspect, and while I will get back to the US, it won't be often enough to check on an empty house and ensure everything is safe. 

So I'm kind of wondering 'rent it out and storage' or 'sell it and look to buy in the UK'.  Anyone have a similar experience?

We kept our house, and are renting it out.  Loads of stuff is in storage (our company pays for it, maybe yours will too).

Your companies' expat package will affect your decision, but we didn't want to sell a house we'd (just barely) finished renovating.  Of course, property values are rising where we bought... so that's another reason to hang on.  And we ARE going back.

Anyhow, I'd keep the house and start looking for a really excellent agent to manage it while you're away.  I wouldn't leave it empty; rent it out!  The damage (reasonable, sane) tenants can do is pretty minor compared to the mould that can grow in a shut-up place, nevermind possible squatters.

Of course, we may end up having to rent a place for a while when we go back, depending on the tenants' contract.  Our company will subsidise our rent if that happens. 

Buying in London is an insane prospect at the moment.  Some will disagree!  Not only that, but we were sent here for three/four years... only to be told that we're moving to Germany after the first year.  Don't know if your company is more stable/less demanding/however you put it, but I'm VERY glad we didn't try to buy here.

So, I'd begin with a close look at your expat package. 

I wish we'd had Madeira's expat package; what a great company!

We sold our house when we moved here and are renting; buying was never an option for us. Our expat package left the burden of leasing to us and we didn't want the expense or hassle.

Our plan was to buy a house in Austin when we returned so we could "retire" then live in an apartment in Houston during the week while we worked. It sounds good in theory, but now I feel, at times, "homeless" and wish we'd kept the house. I often check the real estate in Austin and we talk about buying then leasing out a place in Austin with the plan to remodel the house after moving back.

As for going "native," we live in Teddington and love it here. Our "agent" was stunned that we chose to live in Teddington. We have no school age children so living near the American schools wasn't necessary. There may be some American expats, but we haven't met them yet. We get out in the community, social clubs and volunteering, and it seems like people accept us; perhaps they are just polite and don't want/like us, who knows.

I'd keep the house, if possible.

I'm glad other people are having these thoughts. I have a house in the US and lately I've kicked around selling it. My friend is managing it for me (she manages an apartment building as well), so that's working out fine. But after paying estimated taxes on the income, I'm wondering if it's worth it! Plus, because the market is changing, it's becoming more difficult to find tenents. I had thought about raising the rent $50 a month to cover a tax increase, but my friend told me she just dropped one of her tenent's rent by $100 a month just to keep them in the place. I definitely am in no position to be able to do that. Also, if I move back to the US, I'm most likely not going to move back to the town where my house is located. I'm torn if it's worth the stress or if I should just let it go.

Oh, our package is good in some ways... and pants in others.  Moving to the UK didn't change the salary, for instance.  And the package doesn't allow me to work at all, and we've always had two incomes.  (Mine often being larger).  Anyhow... ideas about the houses..

I don't know where your properties are, or if what we're doing will work for you guys.  We only rent to foreign military personnel/diplomats.  Doing so means our house is technically empty, so our mortgage stays at a low rate.  It's difficult to declare income from people who aren't there in the empty house, as well.

I feel for you, as it is a very difficult choice to make because you can not put a price on emotional ties. Here are a few things to think about.

PRO - As far as money. Property value increases in the UK are on average £1000 per month. I do not know anywhere in the US that ever sees such quick increases. And that quote is expected as a slow increase over the next few years, Experts say property should double again in 2010.

Con or Pro - depending on which way your are going when... Watch conversion rates dollar to pounds. Right now you get less bang for your dollars here. We sold in the UK in 2001 and got only $1.42 per pound, when we sold in the US to move back to the UK we got $1.76 per pound. That hurt! And word is the dollar is only getting weaker. (Ideal time now to sell up in the UK and buy that mansion in the states!)

Con - buying and selling is a pain. Buying here is different, you will not get a buyers agent to represent you unless you pay for it as a seperate service which I am beginning to see more of. It can take several months to close. Selling equally a pain. But worse than that is renting in UK. I stand by all letting agents here as being utterly worthless.

With this in mind my DH bought his house in the UK in 1999 for £89,000 we sold it in 2001 for £197,500 to move to the states. In 2001 we bought our house in the states for $175,000, in 2005 we sold it for $179,500. At which we lost any money made in the dollar weakening and fees.

Even with all the cons if I could go back in time I would just keep my money in UK property.

maderia- curious- why can't you work?  if your husband is on a work permit, then you should be on a work permit dependent visa, hence able to work. right?

It's a part of our expat package.  If I work, we go from a family rate to a single rate for housing, etc.   My healthcare/free flights/most of the other goodies would disappear or be severely cut back.  We'd lose a lot of money!  I don't know how other companies compare, but Japanese companies tend to assume their male managers need a housewife, and set up the packages accordingly. 

thanks for explaining!

how bizzare.  i've never heard of this... i'm not sure how your husband's employer would know if you were working.

do they assume their female managers need a househusband?

Japanese companies don't tend to have female managers.  I love Japan, but it can be a very different place.  I hesitate to use 'sexist', although the word is appropriate in many cases.  Companies support families in ways that are seen as impossible in the West.  Even when not an expat, they'll subsidise or provide housing, transportation and healthcare.  Jobs are still seen as 'for life'  in the bigger companies.

Oh, and I'm sure they'd find out if I was working.  Not worth the risk.  I have enough hobbies to keep me busy, along with volunteering, so it's OK.  I like working, though...

Trying to think of other ideas for the house-owners...  and reasons to hang on.  Well, echoing Shell, the USD isn't worth very much now.  That should change next year.  I'm a bit shocked by Bmore2UK's situation... where the heck is your property that rent is falling?

It's in downtown Baltimore, if you're familiar, Fell's Point, Canton, Patterson Park area. The problem is the housing bubble has burst and it's slowly become a buyers market again. People are starting to buy rather than rent. It looks like my tenants are going to move out, so if anyone out there knows anyone who needs a place in Baltimore, very close to John's Hopkin's Hospital I have a 3 bedroom/1.5 bath house available!

It is great to see others opinions on this. My DH and I have been having a lot of trouble deciding what to do with our house. Our house has gone way up in value and I think if we sold it, we would never be able to afford the same size house again. But, we might not be able to be financially stable without the money from the house. UGH!

Just a tip - we were considering the same possibilities - sell or rent it out, and then we stumbled across a program called the Oxford House. Basically a program that set's up houses for recovering substance abusers.

Now, I know that sounds like the last sort of people you would want in your house. However, after doing much research, I discovered that the program is REALLY good and probably going to work out great for us. One good thing is that they always like to sign 2 year leases, which puts me in a good place for having a stable tenant.

Just a thought. Might see if the local Oxford House folks in your area are looking to setup another house. They have a website you can find easily on google...