Published On: August 2nd, 2023Categories: Real EstateTags: , , ,

Should I Rent or Sell My House When I Move Abroad?

Should I Rent or Sell My House When I Move Abroad?

by Jen Barnett

If you’re a homeowner who’s moving abroad, you may be wondering about what to do with your biggest asset — your home. Most people have three options: selling your home, renting your home to a long-term renter, or renting your home on short-term rental sites, like Airbnb or VRBO. Here are some of things to consider when deciding whether to rent or sell.

Selling Your Home

housing market, should you sell your home when you move abroad: brick home for sale

If you sell your home, you’ll get a lump sump of cash that you can use to buy a home in your new country. It’s challenging for foreigners to get a mortgage in many other countries, so being able to pay cash will greatly expand your options. If you’d rather rent in your new country (and we recommend you do for at least a year before buying a new home), you can also invest that money and use it as source of income. Cash on hand can also help you get a retirement visa for your new country, but you’ll need to have sold your home before you apply, which isn’t practical for everyone.

Another benefit to selling your home is the ability to move abroad without ties. You won’t have to worry about upkeep and maintenance on your house or fret how strangers are treating your property. You won’t need to manage your mortgage payments, property taxes, or homeowners insurance.

On the downside, you won’t build anymore equity in your home once it’s sold, and you may own capital gains tax depending on the selling price and what you owe on your mortgage. To sell it, you’ll also need to empty it, which can be challenging when you’re moving abroad. You’ll have to go through a lifetime’s worth of belongings, decide what to keep, sell, donate, or toss and then follow through with the process. You also won’t have your house to come home to anymore, and it may be cost-prohibitive to replace it in today’s housing market.

Expats Who Should Sell Their Home

This choice is best for expats who know they’re emigrating from the U.S. for good or who need to live off of the equity in their home. To assess this choice, talk to a real estate agent who specializes in your neighborhood. They’ll be able to provide you with an accurate estimate of what you can expect to earn on the sale of your home, what you need to do to get it ready, the best time to list your home, and how long it might take to sell.

Renting Your House Long Term

renting your expat home

The biggest pro of offering your home for long-term rental (LTR) is the steady rental income it can generate. Depending on your existing mortgage payments, the value of your home, and the cost of living in your new country, it could even support you in your new life. You can use the income from your property as passive income for acquiring certain rentista visas, digital nomad visas, entrepreneur visas, and retirement visas.

As opposed to the revolving door of short-term tenants you’ll get with Airbnb, you can choose a tenant who you think will take care of your home. You’ll be able to run background and credit checks and talk to prospective tenants face-to-face.

However, you may also choose the wrong tenants, and it may be hard to evict them from your rental property, depending on your local leasing laws. They may cause excessive damage, and even force you to travel home to manage repairs or eviction. More important than choosing the right tenant may be choosing the right property management company. The right property manager can help mitigate these possibilities and will have existing processes in place for finding, vetting, and managing tenants.

The best real estate property managers will take care of your property and keep tenants happy, too. Ask for recommendations for property management companies in subreddits like Real Estate Investing or in Facebook groups like LadyLandlords or Landlords, Real Estate Investors, & Property Managers Hub.

Expats Who Should Rent Their Home Long Term

This choice is a better option for expats who want to hold on to their property for several years or whose financial situation could benefit from predictable income. Because you haven’t sold your home, you’ll also have it available if living abroad doesn’t working out, and you suddenly need to move home. However, you may find that you need it at a time that’s not convenient for your tenants, and you’ll come home to an empty house. You may want to consider storing your furniture and other belongings until you’re sure you’ll be staying abroad.

Renting Your House Short Term

should you airbnb your home when you move abroad: using airbnb on a laptop

There are several benefits to listing your home on the short-term rental (STR) market. First, you could earn more money each month with short-term rentals, which command a higher price than monthly rentals do. Second, if destructive tenants move in, they’ll usually be there for days — not months or years. Finally, you’ll have your home available when you need it, both in the instance that you need to move home and also for short visits. And you can keep most of your belongings where they are; short-term renters use the olive oil and the bath towels. When you come home, you’ll even be able to sleep in your own bed!

On the downside, these renters tend to be harder on your home and furniture. You may also have to pay higher taxes on rental income and be subject to local regulations that restrict short-term rentals. Your income may be unpredictable and face the whims of vacationers and business travelers who fluctuate between preferring to stay in homes or hotel rooms.

Finding a good short-term rental property manager is even more important for your Airbnb or VRBO, as they’ll be managing the property day-to-day and need experience with using software tools, managing cleaning services, and marketing your property. Ask for recommendations in subreddits like Airbnb or Facebook groups like Airbnb 101 for Beginners or Airbnb Professional Hosts. Use tools like AirDNA to estimate how popular your home could be and help you price it.

Expats Who Should Rent Their Home Short Term

This option is best for expats who aren’t sure how long they’ll live abroad or who will visit home often. This option has the shortest lead time and will let you move abroad fastest. It’s the riskiest proposition but has the most potential for profit, so consider it if your finances can afford the swings in fortune.

Other Considerations

You may want to establish a corporation that is responsible for renting your property. It can be helpful for taxes or for gaining certain types of residency abroad.

Be sure to insure your rental property for all contingencies. We work with Steadily, who covers water damage; fire damage; windstorm, hail, and lightning; legal liability; loss of rent; vandalism and burglary; riot and civil commotion; and other bonus coverages.

Ultimately, what makes more sense for you will depend on your individual circumstances and goals. If you need a lump sum of cash, then selling your house may be the best option for you. If you want a steady stream of income, then renting your house long term may be a better choice. And if you want the flexibility to rent your home out when you want, then renting it short term on Airbnb may be the best option for you. Making more profit is one consideration, but your peace of mind is just as important.

Finally, just because you choose to rent today doesn’t mean you can’t change your mind and sell in a few years or even a few months. Many investors are interested in buying homes with existing renters. And renting your home while you try out a new country doesn’t mean you’re becoming a full-time landlord, which isn’t for everyone.

Here are some other factors to consider when deciding to sell or rent:

  • Housing prices, interest rates, and the current real estate market.
  • The location of your home.
  • The size and condition of your home.
  • The rental demand in your area.
  • The local housing market.
  • Your personal preferences.

It may take careful consideration, but your house can assist you in achieving the ultimate expat goal: creating a wonderful new life abroad.

Jen Barnett Expatsi
Co-founder at Expatsi | Website | + posts

Jen is the co-founder of Expatsi, a company that helps Americans move abroad. She created the Expatsi Test, an assessment that recommends countries for aspiring emigrants based on lifestyle data. Jen has an MBA from Emory University with concentrations in marketing and innovation. She's written for BusinessWeek, Health, Cooking Light, and Southern Living. Prior to Expatsi, she created Freshfully and Bottle & Bone—two businesses in the local food space—and spoke at TEDx on being brave. She's moving to Mexico in 2024, along with her husband and co-founder Brett, pitbull mix Squiggy, and three rotten cats. How can she help you move abroad?

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Jen Barnett Expatsi
Co-founder at Expatsi | Website | + posts

Jen is the co-founder of Expatsi, a company that helps Americans move abroad. She created the Expatsi Test, an assessment that recommends countries for aspiring emigrants based on lifestyle data. Jen has an MBA from Emory University with concentrations in marketing and innovation. She's written for BusinessWeek, Health, Cooking Light, and Southern Living. Prior to Expatsi, she created Freshfully and Bottle & Bone—two businesses in the local food space—and spoke at TEDx on being brave. She's moving to Mexico in 2024, along with her husband and co-founder Brett, pitbull mix Squiggy, and three rotten cats. How can she help you move abroad?