Selling property before emigrating? What are the alternatives?

With so many Brits looking to move to sunnier climates every year (about 350,000), what options and solutions are there for people that want to get their property sold quickly and easily even with negative equity. With the property market facing an ongoing adjustment (prices settling down) over the next couple of years, I wanted to tell you about one route to sale that many are using which is proving to be popular.


I would mention that there are still the obvious routes to exit your property (selling & renting), and the not-so-obvious ones. These are the ones we'll focus more on this blog.


Two years ago I came across a young family about to embark on their new life to New Zealand, only problem was that they were in negative equity in a property market that was fast slowing. Their visas were also just about ready and they feared that everything they'd worked so hard for would be held up because they couldn't sell the house. They'd been on the market for about a year with their local estate agent by now and tension levels were beginning to rise. 


After sitting down with the family I realised a couple of things:

• They wouldn't benefit financially from any sale, speed was more important than releasing cash in their particular case.
• They didn't want to leave the property in the hands of family members or friends in case issues arose and things got messy.
• They didn't want to rent the property out with a standard letting agent and then not know what was happening from the other side of the world, especially since they'd not had great feedback about them. The concern was that if a problem occurred the implications could be distracting and problematic.
• They wanted the freedom of being able to return to their property in case things went pear shaped and they wanted to 'ping-pong-pom' home

Find out what happened to them later on...

In today's property market there are a few products that can satisfy the need to sell fast. In the last year I have helped several companies develop systems and also gleaned from others who offered 'almost-usable' products into ones that people could use (without requiring a degree beforehand).

A great product for you if you want to be rid of a property but don't have the equity to reduce is called 'Rent To Buy' as a means to sell. It was traditionally used by landlords looking for an exit strategy and was later developed for the residential market looking for a way to offload theirs too.

First and foremost, it means a sale will not complete tomorrow - what it does mean is that you can move on completely today and know a sale is in the pipeline for tomorrow.

Here are the pro's and con's for 'Rent To Buy':

Pro's:

• It's quick!
• It's cheap!
• You'll avoid paying capital gains tax as you will have lived abroad for a period of time, normally five years by completion.
• You're not responsible for any maintenance on the property!
• You'll receive around 100-105% of the current value of your home, which is fixed for the period. 
• The screening for tenant buyers is far stricter than normal - so better chance of getting good people into the property.
• If they walk away at any time they will forfeit their saved deposit to you!
• They take better care of the property because they treat it as their home from the start.
• If they default on the rent payment, they will forfeit their deposit to you!
• They can do approved improvements to the house, once checked with you.
• The sale can be handled by you from there so no need to wait around or travel back and forth.
• Benefit from rent profit paid to you.

Con's:

• You still need to have buildings insurance in place, as well as Landlords insurance.
• No tenant is 100% guaranteed to be perfect.
• Will take at least years to complete (a possibility of longer though).
• If they change their mind you will get the saved deposit BUT will mean you have to start the process again with newly sourced tenant-buyers.
• May still mean that the property is on your mind even though you are far away.

It has to be said though that a landlord friend of mine tried 'Rent To Buy' for a property of his and had just installed brand new (cheap as chips) carpet throughout the house only to find that the tenant-buyer had torn it all out(!).........and replaced it with premium carpet worth three times as much. Safe to say he was annoyed at himself that he'd wasted his money but over the moon that there were now higher value ones in place!

Back to the family we discussed earlier....I walked them through 'Rent To Buy' and they were over the moon when I told them what could be done for them. Their visas had now come through and they were able to plan their departure time from the house down to a tee. The negative equity issue didn't matter as over the time period of the sale they would be selling the house for more money anyway. They didn't even have to find a big sum of cash up front for a fee, the service could be carried out by deducting the costs from the rent. All in all a really good outcome!


If you are looking for similar assistance look online by searching for 'Migrate Property' or go to www.migrateproperty.com.