Update March 29th, 2011 – First off, we would like to thank everyone for the advice they gave. We received plenty of emails, tweets, and face to face comments in addition to all the wonderful comments on this blog.
We seem to be in the enviable position of having to make a decision where either outcome will likely be good.
Last night, Ashley and I decided that we would continue trying to sell the house for the month of April. If we have the opportunity to sell at a good price, we probably will (Ashley is still hesitant, so it will have to be a good price). If we have not sold by the beginning of May, we will pursue a rental agreement.
Thanks again for all your comments.
Up until recently, Ashley and I have been 100% certain that we wanted to sell as much of our “stuff” as possible before embarking on our RTW trip. In our minds, that’s always included the house. Now, that certainty has come into question and we need to decide if selling our house is still the best option for us.
Why Sell?
To avoid worrying; to be free. With a house, there are all sorts of things that could come up. Most of our fears revolve around things breaking or problems with renters. We didn’t want to be in the position of having to hire someone to touch up the roofing, change out the flooring, and replace the fridge, all while trying to find a new renter from halfway across the world.
Even if we never have a single problem with the house or renter, we would always have a lingering fear that any day something could go wrong. How much that would bother us, I’m not sure, but it would be there.
We also like to make the argument that we wouldn’t want to move back into our house again, so why should we hang onto it? Our preference would probably be to move into a bigger house somewhere closer to the mountains when/if we decide to settle down.
Why Rent Out the Place?
Right off the hop, I should mention a few things to help set the stage. First, we owe almost nothing on our mortgage and will have the place paid off within a year. The housing market in Saskatchewan is going strong, and there is a shortage of rental properties, especially in Qu’Appelle.
Despite what I just wrote, we are not having much luck selling. Since the house has been on the market, there has been very little interest. I’m starting to think that the house won’t sell before our departure date, and that’s causing me to worry. I’d hate to be stuck paying utility bills and taxes for the first part of our trip.
Then there’s the fact that even though the house is not available for rent we’ve been propositioned by two people in the last week who are both willing to rent on a long term basis. It looks like finding renters won’t be a problem.
I took the time to calculate an appropriate rental rate, and I think we’ll get it. In theory, we should turn enough of a profit renting to equal investment income we would otherwise make on the proceeds from selling. At least renting won’t cost us any money, unless the housing market crashes.
If down the road, we decide to sell the house, we won’t necessarily have to return home to do so. We have family in and around Qu’Appelle that we could probably lean on to sell the house on our behalf if it came to it.
Plus we’ll have the advantage of owning a house in Saskatchewan. There’s probably no better place to return to if we find that we’ve spent all our money and want to save up again for a second round of travel. Living in a house we own will help us save up cash a lot faster than paying rent, and good paying jobs are easy enough to find… now anyways.
I posed this same question on twitter earlier today with only 140 characters. So far respondents are 5 to 1 in favour of selling. What do you think? Do you have some horror stories to share about the time you rented out your house? Did you sell your house before your RTW?
I was one of the 5 for selling on Twitter. We sold our house and don’t regret it one bit…BUT our situation was different. We used the proceeds to fund our travels, it was not paid off and we could not have rented it for the mortgage costs. Sounds to me that you would be fine either way…I say let the market decide. If it sells then it sells, if not then you seem to have support for renting it. A good position to be in! Cheers!
I’m thinking along the same lines, that I’ll be okay either way.
I just hate to scare off these two possible renters by not signing an agreement while I wait for the place to sell and find myself without a sale or renters come July.
First, I have to say you are incredibly lucky you really have the option. I was one who said on Twitter to try to sell but prepared that you might have to rent it out. I’ve had my place on the market since December and have had to face the reality that what I could likely get for it is $40-$50K LESS than what I owe on it (I’m in Chicago). I would much rather sell to give myself more freedom but in the end I’ll likely have to rent (and even then for less than my mortgage payment).
In your case, given that it’s almost paid off, I am tempted to say hold on to it and rent it out – you’d be making money while on the road and, like you said, would have a comfortable place to eventually come back to.
Thanks for the thoughtful advice. We are quite lucky to be in the position that we are. It would be much tougher if we were facing a sale price below what we owe.
I hope the housing market turns around for you.
Mike, I too, was one of the ones on Twitter in favor of selling. That being said, we were in a market where renting wasn’t really an option and selling the property made the most sense. Since you have it almost paid off and good renters, it does sound like renting makes sense for y’all. If it doesn’t sell – I think renting is a great option. In fact, I’d say (fingers crossed) that you’re in a very lucky position right now! Good luck with whatever decision you make.
It does sound like we are in a good position either way. Thanks for the well wishes.
Depends on goals if freedom is what you want and ails all stuff… Sell, that is what I did and no regrets. Anything van go wrong and while you are sipping rum in Thailand want to worry about someone saying they won’t pay unless you fix x or this is wrong blah. Ever had tenants? They most often then not treat places like people treat rental cars. Could have best tenants ever could have worst.
Just do t spend all hour cash if it is paid off take cash and keep enough aside for. A nice 1/4 down payment on next so you can get it on line of credit instead of mortgage next time.
Canadian as well FYI
Good luck
Just ditch it!
Hey Rob, hope you are feeling better. Thanks for chiming in, always good to meet a fellow Canadian. This battle is still too close to call, maybe procrastination is the answer.
Hi Mike, I vote for renting. I rented my condo out when I moved to Montreal for a year. I got a property management company to do all the dirty work — screening applicants, collecting rent, repairs, etc. I knew I was coming back though, and the market in Calgary at the time was crazy, so I knew keeping it would be the best option for me.
Good to hear the renting process went well for you Raymond. I don’t have the luxury of hiring a property management company, as none operate in Qu’Appelle. But, I do think my dad will make a reasonable substitution.
Thanks for all the comments everyone! We’ve decided to keep the house on the market for now, and will pursue a rental agreement if it doesn’t sell in April.
Did a google search on the whole rent or sell thing and came across this post. Currently own a home in North Battleford, planning to move back to Alberta and going through the rent or sell dilemma ourselves. Our house is a fixer upper for sure so we are leaning towards a work for rent situation with a friend as opposed to a traditional renter… So did you sell or rent?
We sold. Hindsight being 20/20, I now know that the house has sold again (about 1 year later) for $35,000 more than what we were able to sell it for one year ago. Still, for us, living halfway across the globe, not having to worry about finding renters, or collecting payments, or fixing the water heater when it broke, was worth something too. If I had to do it over again, I’m not sure if I still would have sold or not.