General Area in Austin>Question Details

Sean Dickson, Home Buyer in Austin, TX

Is it wise to lease my home if I move abroad? If so, who can manage it?

Asked by Sean Dickson, Austin, TX Tue Sep 18, 2007

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A home that is sitting vacant isn't very profitable. Take the time to get a quality tenant and make sure that you screen him or her thoroughly! More homes are going on the market for lease because many are having trouble selling. So depending on your market, you may be able to get a good price. But you also need to make sure that the rent at least covers your mortgage, interest, taxes and insurance.

You can usually find a local property management company in any city. Before calling anyone, do a Google search on the company or try to get a reference. There are plenty of property management companies, and there are plenty that don't do a good job. That's the honest truth.

I wish you the best!
Grant Pollet
The Austin Rental House Specialist!
Web Reference:
0 votes Thank Flag Link Wed Oct 15, 2008
if you can at least get your payment covered every month, then you should definately rent it out. its easy to handle one or two rental properties on your own.
0 votes Thank Flag Link Thu Oct 4, 2007
It is wise as long as you make money on it! It also depenpds on the area and what kind of people you could see in your home. Do you want to put up with late rents & the occasional pet stain? Everyone has given great advice but who can manage it? I hear Perry Henderson has a managament service that will take care of all of your needs. Check him out and ask for references!
0 votes Thank Flag Link Thu Sep 20, 2007
Hi Sean:
It is imperative that you get a very good property manager... then it is just as important that you have someone to be your eyes & ears (family or very close friend).

It can and has been done with great success, but you cannot just leave and check up now & again. You need good follow-up & communication with whomever you hire. Check their references & check the people they've got working for them.

I will echo Paul in saying that you need a full time property manager. They are out there - via the traditional real estate agency to the commercial/residential property management exclusive companies.
0 votes Thank Flag Link Wed Sep 19, 2007
The key is having an outstanding property manager whom you would trust to watch over your asset in your stead. I have clients in Singapore who were burned by poor property management, and recently were forced to make a return trip for the sole purpose of securing new management. Another couple that I sold a condo to last year decided to move to Ecuador for a year as missionaries. Being a very bad time to sell a condo in Scottsdale, they would have lost a fair amount of money by selling it. So we leased it out and turned it over to a good property manager. If you do this, make sure that you don't select just any Realtor, including the agent who sold you the home. You want to make sure that it is someone who manages property full time (not moonlighting in addition to their main duties of selling), has contractors on call, is accustomed to making the mortgage payments, collecting the rent, renewing home warranty policies, etc. Best of luck in whatever you decide.
0 votes Thank Flag Link Tue Sep 18, 2007

It depends how long will you be gone and when you return will it be the this city? What is you equity position. Will the rental income cover your mortgage payment, taxes and insurance. Allow for a vacancy before making a decision.

I would have it professionally managed since you are going to be out of the country.
0 votes Thank Flag Link Tue Sep 18, 2007
Pam Winterba…, Real Estate Pro in ,
Being a landlord isn't always easy and being abroad doesn't make it easier. However, I did it for almost 3 years and it worked for me. There were a few stressful moments and I had to trust those back in the USA to quickly help me resolve whatever issues came up but I've always joked RoterRooter takes mastercard over the phone at 3 am in the morning when your in England and your tenants toilet backs up in Texas.

I'm an investor so I don't believe in selling when everyone is selling. I believe in selling when everyone is buying. Austin's market doesn't appear to be taking as hard of hit as other markets in the country but if selling is your other option make sure it makes sense in the current market or otherwise hold onto it and see my comment about tax free capital gains below.

Another consideration is will you be returning to Austin anytime soon (1-3yrs) or is this an indefinite move. If you don't plan on being abroad long and will return to Austin you might hold onto the property and coordinate your lease(s) with your estimated return so you have a home when you come back. Especially if you've got good real estate in Austin. Odds are if it is good real estate it isn't going to be cheaper the next time you buy it.

Lastly, if your unsure about returning to Austin and/or when. If you've lived in the house the last 2 years then you got 3 more years to play with in terms of your profit being tax free. IRS says you get a capital gains exclusion on your homestead up to $250k a person or $500k married couple if you've lived in the house the last 2 of 5 years from date of sale. Rules are strict on this so make sure you talk to your CPA. If you rent look at it this way you won't find a 401k plan to match.

Make sure your cash flow makes sense and then find a reputable property manager and price it to rent. I'd suggest getting as many referrals as possible on a property managers, interview at least 3 and call their referrals.

Enjoy your time abroad!
0 votes Thank Flag Link Tue Sep 18, 2007
I've done this before and used paypal to transfer payments to the owner. It's important that you set rules in place with a property manager as to how much signature authority he has with expenses that come up. I had a water leak that was expensive to fix and it took a day to get in touch with the owner so the tenants went without water....
0 votes Thank Flag Link Tue Sep 18, 2007
It depends ... how long do you plan to live abroad? Will the rent cover your PITI payments (positive or break-even cash flow)? Is negative cash flow an option? How long have you owned the home? If you sold, do you have enough equity in the home to break even or make a profit? There are many reputable property management companies in Austin (that will charge a fee, of course, so that can impact your cash flow) or you may have a friend you trust whom you could pay.
0 votes Thank Flag Link Tue Sep 18, 2007
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