Posted on 14 February 2011
Rent out your home and move abroad
Waiting for the economy to pick up? Why not rent out your home for 12 months and escape abroad
You wait all year for it – the holiday abroad – then, before you know it, you’re back where you started. At home, it’s raining, the tan is peeling and all memories of watching the sunset while sipping a glass of local vino are fading. A growing number of Britons, however, are keen to keep the holiday spirit going. Fed up with the inclement weather and the gloomy economic climate, they are heading abroad not merely for the summer, but for a year or two. Call it a grown-up gap year, if you will.
“We feel an absolute sense of escape from the gloom and doom at home,” says Marie McLaughlin, one of the world’s leading operatic sopranos.
The principle is straightforward. The average UK rental yield is currently 6.4% – the highest since February 2006, according to Paragon Mortgages – so a £500,000 property could bring in more than £2,600 a month gross rental income.
While your money will stretch much further if you rent out in pounds and head to a dollar-based or non euro country, the weakening euro is making the move to Europe less punishing for Britons than it has been so far this year.
Rob Smith, a London property developer, and his wife, Amanda, who runs Trading Spaces, an estate agent that specialises in loft apartments, have decided that now is the time to take a sabbatical from their work, which has brought in next to no income this year, and sail around Greece and Turkey until the UK property market picks up. They have let out their two-bedroom Victorian terrace in Balham, south London, for £3,000 a month and, having arrived in Turkey earlier this summer with a budget of £40,000, have bought a Sun Odyssey 35 and are ready to set sail.
“We usually go sailing for two weeks every year, and had always thought that one day we might just take off for a few months or more,” says Rob, 49. “Without the credit crunch, we wouldn’t have been able to extract ourselves from our businesses and do what we’ve always dreamt of doing.” The couple’s home was valued at £1.15m last August, but failed to attract offers above £700,000. The plan, if there is one, is to spend the winter months in Marmaris, Turkey – enjoying temperatures of up to 21C – then just see what happens.
“It was a choice of sitting in poverty in London on zero income and keeping Amanda’s business ticking over, or taking a gap year until the UK property market picks up,” he adds. “Most of our friends would love to do this, but mortgages and family commitments stop them. It would have been nicer to have sold our house, but we still have our assets and options.”
As a property landlord, you need your paperwork in order. From October 1, it will be compulsory to have an energy performance certificate. “You will also need a gas safety certificate, and an electricity certificate is advisable,” says Kate Faulkner, managing director of www.designsonproperty.co.uk.
If you are living abroad, opt for full management of your property: someone who will take control of your inventory and tenants.
In London, demand for rental homes still outstrips supply. The average house in the capital rents out for £3,000 a month (the figure is £931 outside the southeast), according to the Association of Residential Letting Agents.
Elsewhere in the country, says Belvoir Lettings, the highest demand is for three- or four-bedroom houses in rural market towns and places within an hour’s commute of London, which go for £500-£750 a month.
RELAXATION FOR RENT
Take a rest from the rat race and live the continental way
August 17, 2008 The Sunday Times (Abridged)