Moving to a new country is challenging, and managing your home is likely the most significant decision when exploring this option. Whether you’re letting go of a permanent residence to travel the world or balancing property ownership from afar, the choices are as varied as they are impactful.
Below, we’ll explore the strategies expats and digital nomads have used to decide what to do with real estate properties before moving abroad.
You Have Choices
➥ Owning and Renting Out Property
Maintaining property ownership remains popular for many expats who rent out their property while abroad. Hiring a property manager can streamline this process, covering costs like property taxes and homeowners’ insurance through rental income and ensuring the property is well-maintained.
However, it’s essential to be aware of the risks. One expat shared a cautionary tale of a tenant who stopped paying rent, leading to a lengthy and costly eviction process. Understanding local eviction laws and preparing for potential issues is crucial when renting your property.
➥ Selling Everything
Selling your home and possessions can liberate those seeking a truly unencumbered lifestyle. As one expat put it, “I sold everything. I hired a realtor for the house but sold all my other belongings myself. It was such a liberating experience.” This approach simplifies life and provides a financial cushion that you can redirect into sustaining a travel-focused lifestyle.
➥ Maintaining a Home Base
Some expats choose to maintain their homes in their home country as a stable investment or a fallback option. This option can be particularly appealing when real estate is considered a safer asset during economic uncertainty. “Regardless, I don’t think I will sell my home in the States because inflation is real. My kid’s rent will be more than my mortgage,” an expat explained.
➥ Expanding Real Estate Investments
Then, some use their expat journey as an opportunity to expand their real estate portfolio. One individual started with two housing units and, 25 years later, owns 14 units mortgage-free. This strategy secures a steady income stream and builds significant wealth over time.
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But Where Do You Stay When Back Home?
➡︎ Embracing Housesitting and Co-living
For some digital nomads, housesitting has become a game-changer, significantly reducing housing-related expenses. Trusted Housesitters is a popular platform that connects nomads with homeowners needing someone to care for their homes and pets while away. This arrangement cuts costs and offers a way to experience living in different communities and cultures. Additionally, coliving spaces provide shared accommodations that foster a sense of community and offer flexible living arrangements.
➡︎ Embracing Family Support
Many expats maintain a fluid lifestyle by relying on family back home. One nomad mentioned, “I have no home in the US; I have family waiting for me to come and sleep on their couches or spare rooms. We all have an understanding.” This flexible arrangement allows for a nomadic lifestyle without the burden of maintaining a permanent residence.
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Consider This Before Deciding
When deciding what to do with your home as you embark on or continue your expat journey, consider the following:
❖ Legal and Financial Implications
Understand the tax implications, legal responsibilities, and financial commitments of renting, selling, or maintaining properties across borders.
❖ Management from Afar
Assess how you’ll manage property issues remotely. This option might mean hiring a reliable property manager or using technology to monitor your property.
❖ Risk Management
Prepare for worst-case scenarios, especially when renting out property. Adequate insurance, understanding tenant laws, and having a financial buffer can mitigate potential problems.
❖ Lifestyle Compatibility
Your decision should align with your lifestyle goals and mobility. Maintaining a property might not make sense for full-time travelers, whereas it could be crucial for those who plan to return frequently or eventually resettle.
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Questions To Help You Decide
- What are my long-term goals for living abroad, and how does maintaining a home in my home country fit into these plans?
- How comfortable am I with others living in and managing my property in my absence?
- What is my risk tolerance for potential property-related issues, such as non-payment of rent or property damage?
- Am I prepared to handle the legal and financial responsibilities of being a landlord from afar?
- Could the money tied up in my home be working harder for me in another way if I choose to sell?
- How does the idea of selling everything and starting fresh make me feel? Is it more liberating or daunting?
- If I were to return to my home country, would I regret selling or renting out my home?
- What are the tax implications of selling my home versus renting it out, and how will that affect my financial health?
- How does the real estate market in my home country compare to my new location? Would holding onto property back home serve as a better investment?
- Am I equipped to manage a crisis with my property from another country, or would this uncertainty be too stressful?
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Take These Steps Before Deciding
☑︎ Evaluate Your Long-term Goals
Decide whether maintaining a home in your country of origin aligns with your long-term travel or living plans. Consider factors like return frequency, family connections, and financial goals.
☑︎ Consult a Real Estate Professional
Before deciding about renting or selling, consult a real estate agent familiar with your home market and the implications of long-distance property management.
☑︎ Research Local Laws and Tax Implications
Understand your home country’s property laws, tenant rights, and tax implications. This research is crucial if you plan to rent out your property.
☑︎ Set Up a Reliable Management System
If renting, hire a reputable property management company to handle tenant issues, maintenance, and rent collection. When using platforms like Airbnb, consider using a service that manages short-term rentals.
☑︎ Secure Comprehensive Insurance
Ensure you have adequate homeowner’s and landlord insurance covering long-distance property management scenarios.
☑︎ Create a Financial Safety Net
Prepare for unforeseen expenses, such as vacancies, repairs, or legal issues. Keep an emergency fund covering several months of mortgage payments and maintenance costs.
☑︎ Leverage Technology for Remote Management
Use property management software or apps to monitor your property, communicate with tenants, and manage finances from abroad.
☑︎ Consider Selling If Practical
If the burden of managing a property from afar outweighs the benefits, consider selling it. Invest the proceeds in a way that supports your nomadic lifestyle or saves for future investments.
☑︎ Explore Housesitting or Co-living Options
If you’re flexible with living arrangements, consider housesitting to reduce living expenses abroad or explore co-living spaces that offer short-term, flexible leases.
☑︎ Stay Informed a2nd Flexible
The world of real estate and expat living is ever-changing. Stay informed about market trends and legal changes, and be prepared to adjust your strategy as needed.
Your choice about your home is profoundly personal and significantly impacts your flexibility, financial health, and peace of mind. By considering these real-world strategies and insights, you can make more informed decisions that align with your aspirations and circumstances as you live your adventure abroad.
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Now, I’d love to hear from you! What are your thoughts on Costa Rica? Add a comment and share your thoughts!
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This post was previously published on Marcia Hylton’s blog.
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