Anyone sold their house and rented (out of preference)?
Discussion
My wife and I are thinking about changing our lifestyle, but we have a big disagreement on whether to continue owning a home, rather than switching to renting. I'm wondering if anyone here has worked through the same dilemma?
Currently 52 years old, and we have now saved enough so we no longer need to work. We still do some work, but it is only for fun/interest/challenge, not because we need to earn money. Also, any work we do is contingent on it not interfering with our lifestyle. On this we both agree.
I'd like to split my time spending say 5 months a year in Switzerland for the ski season, 4 months in France for the summer, with the remaining time in the UK. If we did this, I think it would be better to sell our house in the UK, and just sign short-term rental agreements for the properties we need, when we need them. My wife thinks this is crazy - she thinks you always need a stable base, hence keeping the house in the UK.
She also thinks it would be difficult to find the right quality of properties to rent. And she dislikes the idea of needing to get rid of her possessions (she thinks we would be "living out of a suitcase"). Bottom line is she doesn't know anyone who does this, and thinks the reality just isn't practical.
From my point of view, if we sold our house in the UK, and just put that money into long term gilts, it would likely fund most of our rent. I've been contacting different property owners in the alps, and, provided you are looking far enough ahead, and once we are willing to spend say £8k per month, most owners who would otherwise be trying to rent their house as a holiday-let, are more than willing to sign up a tenant who pays upfront, via bank transfer, where they don't have the hassle/risk of a different family every week, or having to pay an agent who takes a large commission.
We could keep the current house in the UK, but we don't have the spare income to still also spend £8k/month renting for 9 months per year. We could spend less renting, but then you are getting much smaller properties which aren't as comfortable/relaxing/spacious. Or we could just reduce the amount of time we spend outside of the UK.
I think many British people have an attitude which is instinctively biased against renting, and to be fair, until fairly recently, I probably had that bias too. But when I look more objectively at the costs, renting a property where you want it, when you need it, feels like it makes sense, provided you can still retain 'creature comforts'.
So back to my original question - has anyone here faced this dilemma? Would be interested in hearing your thoughts/experiences.
Currently 52 years old, and we have now saved enough so we no longer need to work. We still do some work, but it is only for fun/interest/challenge, not because we need to earn money. Also, any work we do is contingent on it not interfering with our lifestyle. On this we both agree.
I'd like to split my time spending say 5 months a year in Switzerland for the ski season, 4 months in France for the summer, with the remaining time in the UK. If we did this, I think it would be better to sell our house in the UK, and just sign short-term rental agreements for the properties we need, when we need them. My wife thinks this is crazy - she thinks you always need a stable base, hence keeping the house in the UK.
She also thinks it would be difficult to find the right quality of properties to rent. And she dislikes the idea of needing to get rid of her possessions (she thinks we would be "living out of a suitcase"). Bottom line is she doesn't know anyone who does this, and thinks the reality just isn't practical.
From my point of view, if we sold our house in the UK, and just put that money into long term gilts, it would likely fund most of our rent. I've been contacting different property owners in the alps, and, provided you are looking far enough ahead, and once we are willing to spend say £8k per month, most owners who would otherwise be trying to rent their house as a holiday-let, are more than willing to sign up a tenant who pays upfront, via bank transfer, where they don't have the hassle/risk of a different family every week, or having to pay an agent who takes a large commission.
We could keep the current house in the UK, but we don't have the spare income to still also spend £8k/month renting for 9 months per year. We could spend less renting, but then you are getting much smaller properties which aren't as comfortable/relaxing/spacious. Or we could just reduce the amount of time we spend outside of the UK.
I think many British people have an attitude which is instinctively biased against renting, and to be fair, until fairly recently, I probably had that bias too. But when I look more objectively at the costs, renting a property where you want it, when you need it, feels like it makes sense, provided you can still retain 'creature comforts'.
So back to my original question - has anyone here faced this dilemma? Would be interested in hearing your thoughts/experiences.
My parents did this and regretted it 20 years later. Sold a nice house, and now are in a smaller flat.
Problem is you are at the mercy of the future economy / house prices. Keeping your current house hedges against that. Can you rent your house for a few years? Or maybe just downsize so you have a usefull UK base. Maybe buy a UK home where there is a market for short term lets (Natiional Park / Cornwall etc).
Either way sounds like a good position you are in, nice one.
Problem is you are at the mercy of the future economy / house prices. Keeping your current house hedges against that. Can you rent your house for a few years? Or maybe just downsize so you have a usefull UK base. Maybe buy a UK home where there is a market for short term lets (Natiional Park / Cornwall etc).
Either way sounds like a good position you are in, nice one.
Rent will always outstrip mortgage payments over time.
You are 52, inshalla you'll have another 30+ years of life ahead of you.
By all means travel and enjoy yourself but do not ever lose that most important of securities, shelter.
I would love to spend my time as you suggest, but the reality is you won't keep it going for ever, especially as health and energy fail.
It may be a good idea to sell your house, with all of it's responsibilities and risks, and buy a flat in a nice area.
If you wanted an extended period away from 'home' you could store your most treasured possessions and let the flat as an AirB&B.
A flat in a maintained building, will allow you to be away from home for extended periods without worry whilst also allowing you the luxury of a base.
A friend of mine who is a (divorced) Ship's Captain, but also a keen ocean yachtsman, has a flat in Southampton. He can spend a few months at sea, and then maybe a few months sailing, but when he returns hoe he still has his records, books, photographs and most importantly a refuge.
His adult children can come and visit. He has an address and his NHS access. He is not going to be caught out by a sudden price increase in property prices or changes in renting rules. He pays a small service charge, and a friend has a key and checks on the place from time to time.
I think it's called having your cake and eating it.
You are 52, inshalla you'll have another 30+ years of life ahead of you.
By all means travel and enjoy yourself but do not ever lose that most important of securities, shelter.
I would love to spend my time as you suggest, but the reality is you won't keep it going for ever, especially as health and energy fail.
It may be a good idea to sell your house, with all of it's responsibilities and risks, and buy a flat in a nice area.
If you wanted an extended period away from 'home' you could store your most treasured possessions and let the flat as an AirB&B.
A flat in a maintained building, will allow you to be away from home for extended periods without worry whilst also allowing you the luxury of a base.
A friend of mine who is a (divorced) Ship's Captain, but also a keen ocean yachtsman, has a flat in Southampton. He can spend a few months at sea, and then maybe a few months sailing, but when he returns hoe he still has his records, books, photographs and most importantly a refuge.
His adult children can come and visit. He has an address and his NHS access. He is not going to be caught out by a sudden price increase in property prices or changes in renting rules. He pays a small service charge, and a friend has a key and checks on the place from time to time.
I think it's called having your cake and eating it.
I agree with your wife. Friends of ours have recently sold their rather grand house and have bought a small 2 bed bungalow as a base in the UK, they are currently searching for a new pad in France. We plan to do the same at some point in the future. When I'm back in the UK I want my own gaff, with my furniture, clothes I can leave in the UK, tools in the garage, a bbq and my kitchen etc. I can't think of anything worse from a housing perspective than going from rental to rental. You're essentially going to be moving 3 times a year...sod that.
for diff reasons; didn't want to lose a buyer/was moving to a new area. persuaded Mrs after much haggling to go into rented with the intent of buying ( mine would have been to just rent), no matter what figures i showed her always came back to 'but rent costs money / 'i don't want to pay someones elses mortgage-profit'.
ended up renting for close to 2 yrs as couldn't find the right house, upside was an invested amount that grew nicely, downside was a miserable wife. the issue in this country is certainty - being able to rent somewhere long long term without the fear of having to up sticks again and again was/is an issue; because without that stability it is kind of living out of boxes; but for me minimalist living like that is fine, again, not so much for Mrs.
if i was planning part of a year away then that may be more easy to debate/win.....good luck !!
ended up renting for close to 2 yrs as couldn't find the right house, upside was an invested amount that grew nicely, downside was a miserable wife. the issue in this country is certainty - being able to rent somewhere long long term without the fear of having to up sticks again and again was/is an issue; because without that stability it is kind of living out of boxes; but for me minimalist living like that is fine, again, not so much for Mrs.
if i was planning part of a year away then that may be more easy to debate/win.....good luck !!
You are vastly underestimating the rent inflation over time. Its a common theme on this forum. You would end up doing a massive error if you decide just to rent. The gilt return will progressively provide you with worse properties over time.
The us market is completely different; hope you are not influenced by some americans.
The us market is completely different; hope you are not influenced by some americans.
happytobealive said:
just sign short-term rental agreements for the properties we need, when we need them. My wife thinks this is crazy - she thinks you always need a stable base, hence keeping the house in the UK.
She also thinks it would be difficult to find the right quality of properties to rent. And she dislikes the idea of needing to get rid of her possessions (she thinks we would be "living out of a suitcase"). Bottom line is she doesn't know anyone who does this, and thinks the reality just isn't practical.
You will pay strong money for nice short term rentals. Normal resi landlords don’t like providing them so, if you’re upfront about how long you want it for, you’ll pay a premium. Alternatively you’re looking at holiday rentals where you might get a better deal than the headline rate if you wanted for say 3-4 months, especially outside peak season. She also thinks it would be difficult to find the right quality of properties to rent. And she dislikes the idea of needing to get rid of her possessions (she thinks we would be "living out of a suitcase"). Bottom line is she doesn't know anyone who does this, and thinks the reality just isn't practical.
Not directly comparable, but I chose to rent rather than buy for years for the flexibility, avoiding being responsible for maintenance and the relative costs (rent frequently below an interest only mortgage on the property). When I was younger this was ideal as it meant I could move flat as I moved job to keep commutes short, I could take riskier jobs or walk out of s
t ones without having any debt hanging over my head and I could do things like relocate to Paris at the drop of a hat. During all that time I was chucking a fair amount into the bank so when we eventually decided to have a kid and put down some more permanent roots, we could buy with cash. I'm in the somewhat unusual position of having never taken out a mortgage, but I have paid one off as I cleared my g/f's mortgage.
We actively wanted to put down roots, to be actively involved in a community, to build a local social network ... and I like tinkering, so we bought an old head that needs constant work to stop it from falling down, so the itinerant lifestyle your considering would leave me feeling unrooted and stressed ... but that's just me. From a financial perspective what you're suggesting is absolutely fine if you don't mind running a little bit of financial risk.
The best hedge for owning an asset ... is to own it. So if your primary long-term concern is to be able to own the biggest house in the UK that you can, then you better own a UK house right now. If you just want to have the option to have some kind of house in the UK and you've got a pile of savings in the bank, then you are absolutely fine.
Most Brits have tunnel vision about the housing market. They put all of their disposable into home ownership. They think it's an investment. They think rent is "dead money". They think it is normal to be massively geared. In that world it is genuinely financially dangerous not to own property as you need to be hedged with regard to your long term objective; owning the closest thing to Balmoral that you can't really afford. But if you don't stick every last penny into the housing market and you notice things like the stock market performing just a well as the housing market and you aren't interested in being geared to the hilt, then you don't have to follow the herd.
t ones without having any debt hanging over my head and I could do things like relocate to Paris at the drop of a hat. During all that time I was chucking a fair amount into the bank so when we eventually decided to have a kid and put down some more permanent roots, we could buy with cash. I'm in the somewhat unusual position of having never taken out a mortgage, but I have paid one off as I cleared my g/f's mortgage.We actively wanted to put down roots, to be actively involved in a community, to build a local social network ... and I like tinkering, so we bought an old head that needs constant work to stop it from falling down, so the itinerant lifestyle your considering would leave me feeling unrooted and stressed ... but that's just me. From a financial perspective what you're suggesting is absolutely fine if you don't mind running a little bit of financial risk.
The best hedge for owning an asset ... is to own it. So if your primary long-term concern is to be able to own the biggest house in the UK that you can, then you better own a UK house right now. If you just want to have the option to have some kind of house in the UK and you've got a pile of savings in the bank, then you are absolutely fine.
Most Brits have tunnel vision about the housing market. They put all of their disposable into home ownership. They think it's an investment. They think rent is "dead money". They think it is normal to be massively geared. In that world it is genuinely financially dangerous not to own property as you need to be hedged with regard to your long term objective; owning the closest thing to Balmoral that you can't really afford. But if you don't stick every last penny into the housing market and you notice things like the stock market performing just a well as the housing market and you aren't interested in being geared to the hilt, then you don't have to follow the herd.
I would never give up the security and permanence of owning my own home to take on the risk and uncertainty of renting.
You will always be at the mercy of landlords.
I agree with your wife and think you would be very foolish to do this.
You will always be at the mercy of landlords.
I agree with your wife and think you would be very foolish to do this.
Edited by Monkeylegend on Saturday 20th June 19:07
LooneyTunes said:
... Alternatively you re looking at holiday rentals where you might get a better deal than the headline rate if you wanted for say 3-4 months, especially outside peak season.
Yes, this was my thinking.... find good places like on airbnb etc, contact the owners directly, and offer a pay directly for a longer stay. We all know sites like airbnb take a hefty commission, and they also allow people to cancel their bookings (effectively transferring all the risk to the property owner). I'd be offering to pay via bank transfer, with no cancellation option and so give certainty to the owner, in return for a better price.paralla said:
Living a transient lifestyle provides no sense of community. As I get older and certainly into retirement I place a huge value being a part of something bigger than just me and my husband.
This logic I think is valid. But I suppose I would be achieving some of this by meeting up with like-minded people where I was staying. For example, I spent quite a lot of time in Verbier last winter, and met lots of interesting people, and we had a very good time as we all had shared interest in skiing/mountains.ATG said:
Not directly comparable, but I chose to rent rather than buy for years for the flexibility, avoiding being responsible for maintenance and the relative costs (rent frequently below an interest only mortgage on the property). When I was younger this was ideal as it meant I could move flat as I moved job to keep commutes short, I could take riskier jobs or walk out of st ones without having any debt hanging over my head and I could do things like relocate to Paris at the drop of a hat. During all that time I was chucking a fair amount into the bank so when we eventually decided to have a kid and put down some more permanent roots, we could buy with cash. I'm in the somewhat unusual position of having never taken out a mortgage, but I have paid one off as I cleared my g/f's mortgage.
We actively wanted to put down roots, to be actively involved in a community, to build a local social network ... and I like tinkering, so we bought an old head that needs constant work to stop it from falling down, so the itinerant lifestyle your considering would leave me feeling unrooted and stressed ... but that's just me. From a financial perspective what you're suggesting is absolutely fine if you don't mind running a little bit of financial risk.
The best hedge for owning an asset ... is to own it. So if your primary long-term concern is to be able to own the biggest house in the UK that you can, then you better own a UK house right now. If you just want to have the option to have some kind of house in the UK and you've got a pile of savings in the bank, then you are absolutely fine.
Most Brits have tunnel vision about the housing market. They put all of their disposable into home ownership. They think it's an investment. They think rent is "dead money". They think it is normal to be massively geared. In that world it is genuinely financially dangerous not to own property as you need to be hedged with regard to your long term objective; owning the closest thing to Balmoral that you can't really afford. But if you don't stick every last penny into the housing market and you notice things like the stock market performing just a well as the housing market and you aren't interested in being geared to the hilt, then you don't have to follow the herd.
Your post matches a lot of my thinking. We currently have a decent house in Surrey (detached, 5 bed, blah blah), and we could have "upgraded" some time ago to something even larger on one of the private estates. Instead I focused on saving and investing, which is why we now have a pretty decent sum in liquid investments. So I'm not worried about house price inflation, as I am likely to get a similar or better return from my other investments - the only reason for choosing gilts for the proceeds from any house sale was to mitigate one of my wife's concerns about taking too much market risk.t ones without having any debt hanging over my head and I could do things like relocate to Paris at the drop of a hat. During all that time I was chucking a fair amount into the bank so when we eventually decided to have a kid and put down some more permanent roots, we could buy with cash. I'm in the somewhat unusual position of having never taken out a mortgage, but I have paid one off as I cleared my g/f's mortgage.We actively wanted to put down roots, to be actively involved in a community, to build a local social network ... and I like tinkering, so we bought an old head that needs constant work to stop it from falling down, so the itinerant lifestyle your considering would leave me feeling unrooted and stressed ... but that's just me. From a financial perspective what you're suggesting is absolutely fine if you don't mind running a little bit of financial risk.
The best hedge for owning an asset ... is to own it. So if your primary long-term concern is to be able to own the biggest house in the UK that you can, then you better own a UK house right now. If you just want to have the option to have some kind of house in the UK and you've got a pile of savings in the bank, then you are absolutely fine.
Most Brits have tunnel vision about the housing market. They put all of their disposable into home ownership. They think it's an investment. They think rent is "dead money". They think it is normal to be massively geared. In that world it is genuinely financially dangerous not to own property as you need to be hedged with regard to your long term objective; owning the closest thing to Balmoral that you can't really afford. But if you don't stick every last penny into the housing market and you notice things like the stock market performing just a well as the housing market and you aren't interested in being geared to the hilt, then you don't have to follow the herd.
locoloco said:
...upside was an invested amount that grew nicely, downside was a miserable wife. the issue in this country is certainty - being able to rent somewhere long long term without the fear of having to up sticks again and again was/is an issue; because without that stability it is kind of living out of boxes; but for me minimalist living like that is fine, again, not so much for Mrs.
...
That makes a lot of sense - I think our wife's probably have a similar perspective. ...
Crazy idea.
Why not just rent out your home and then live where you want. You will make a return, probably not as much if you invest I. stocks or shares but at least you will have hard security.
Other things to think about:
What happens if you need long term care?
What happens if your wife meets someone else (see the I don't love you anymore thread, full of people who say it won't happen to them)
Having security helps if you need to borrow money from t;he bank or need a loan for a car etc
An alternative approach would be to downsize and use the spare cash.
Why not just rent out your home and then live where you want. You will make a return, probably not as much if you invest I. stocks or shares but at least you will have hard security.
Other things to think about:
What happens if you need long term care?
What happens if your wife meets someone else (see the I don't love you anymore thread, full of people who say it won't happen to them)
Having security helps if you need to borrow money from t;he bank or need a loan for a car etc
An alternative approach would be to downsize and use the spare cash.
I was in a slightly similar position but I was considering selling my main U.K. house and buying a smaller property or two in the U.K. and buying a property in the country I spend most of my time. The considerable costs of selling my main house & buying additional property in the U.K. was not appealing so I decided to keep my main U.K. house and dip into my investments to buy property outside the U.K.
I will have property that I can rent out and have an income plus I avoid paying someone else's mortgage. If the figures stack up correctly the yields on the rented property/properties should match or even better my investment returns, plus it allows me to live where I want. I find my lifestyle very stable and it's very agreeable.
Obviously different countries have different tax laws and I made sure I don't face any additional taxes in my destination country but do your research.
I will have property that I can rent out and have an income plus I avoid paying someone else's mortgage. If the figures stack up correctly the yields on the rented property/properties should match or even better my investment returns, plus it allows me to live where I want. I find my lifestyle very stable and it's very agreeable.
Obviously different countries have different tax laws and I made sure I don't face any additional taxes in my destination country but do your research.
I’ve been thinking about it.
At the more expensive end of the market the rental yield is pretty low, plus you save 10%+ in stamp duty meaning you can move about more freely and not be tied to one place.
Also no more repairs or maintenance.
If that cash can get 8-10% over the long term it seems like it could be a good idea, although it’s nice to have the control of owning.
At the more expensive end of the market the rental yield is pretty low, plus you save 10%+ in stamp duty meaning you can move about more freely and not be tied to one place.
Also no more repairs or maintenance.
If that cash can get 8-10% over the long term it seems like it could be a good idea, although it’s nice to have the control of owning.
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