Mortgage
If your mortgage won’t be covered by rent from tenants while you are away, think about
switching to a flexible mortgage with online facilities. This is the perfect mortgage for
international volunteers as you can pay bigger monthly payments before you leave or after
you come back, and in return make smaller payments or even take a complete mortgage
‘holiday’ while you are abroad. Ideally, you should start making additional repayments a
year in advance so that the pressure is off, both while you volunteer and once you return.
Selling
The beauty of selling your home (and maybe some possessions too) is that you’re free of
worries; you have no truculent tenants to potentially make your time volunteering any
more challenging than it may already be. If you invest the money in a high-interest earning
account, you may be able to keep your savings safe so that you are in a position to buy an-
other home on your return. The risk is that if property prices rise faster than your savings,
you may be forced to downsize when you buy back into the market. Don’t underestimate
the cost of buying again either – taxes, agent and legal fees all add up. For these reasons,
selling your home is probably only a sensible option for long-term volunteers.
Letting (Leasing) Your Home
Most international volunteers who own property decide on this option. With luck your
tenants’ rent will cover your mortgage, your bills and even give you a modest income while
you are away. Bear in mind, though, that rental income is taxable.
Here are some things to consider when letting your house or appartment.
Tell Your Mortgage Lender
Look carefully at the small print in the terms and conditions section of your mortgage docu-
ment and it will invariably stipulate that you need to notify the lender if you let your home.
Finding Tenants & an Agent
You may decide to let privately and to find your tenants by advertising in local papers,
shops or websites (universities often have websites that are referred to by visiting teaching
staff, for example). Remember to obtain character references and bank statements (or pay-
slips from an employer) and a watertight tenancy agreement. Although renting to friends
can seem the easiest option, it can be disastrous: if something goes wrong with the rental
arrangement, your friendship may be knocked on the head forever.
The other option is to let your property through a reputable agent. Although this will cost
you more, it can be a safer option. Check the agent is well-established and affiliated to a
respected industry body which imposes minimum standards. Whether you use an agent or
go it alone, you should start looking for tenants around four to eight weeks before leaving.
Safety Issues
When you let your home in the UK you need to comply with certain legal obligations
regarding safety. These usually entail having your gas, electrical appliances and fixed elec-
trical installations tested for safety. If you are letting through an agent they will normally
arrange for these checks to be carried out, for a fee.
Tax
If you let your home while you are abroad, remember that you’ll be taxed on any profit,
minus expenses like wear and tear, decorating and repairs. If you are going away for more
than six months, you will probably have tax deducted from your rental income. Whether
you own another house, whether you let it, and whether you live in your home again on
your return will also have an impact, so check out your status with a tax adviser.
Decorating
Sprucing up your property before letting it will often ensure a better rent. The agent, if you
are using one, will often suggest ways in which your property could be made more attrac-
tive, such as new carpets or a lick of paint.Removing Items of Value
It goes without saying, but if you’re letting your property fully furnished, take out items
that are of sentimental value or items that you cannot replace like photos and antiques.
Always assume the worst-case scenario; the contents of your home will not be treated as
well as you would treat them.Storage of Personal Effects
Should you decide to put your personal effects into storage, shop around, get quotes and
ask lots of questions. For instance, find out how much notice is needed to collect your
stuff; what insurance cover is offered; if insurance is included in the price; if the price
includes tax; what the storage conditions are like; and if you can see the place where it will
be stored (look out for damp areas that could damage your valuables). It could also be
relevant to find out whether you can get access to your belongings while they are in storage
and, if so, how much it costs. It’s normally cheaper if you book storage for a long period
of time (rather than constantly renewing) and don’t need access. Never put precious items
like jewellery, money or documents into storage – put them in a safe-deposit box instead.Inventory
An inventory is essential for avoiding potential conflict when you reclaim your home. You
can draw one yourself or pay an agent to do it as part of their service. If you are doing it
yourself be meticulous: for example, write down the exact make and model of stoves and
fridges and make a note of every blemish so there’s no dispute later. It’s a good idea to take
electronically dated photographs of your contents as a backup, but don’t rely on them: they
are no defence in court as dates can be tampered with.Building & Contents Insurance
If you tell your insurer that you’re letting your house, they will almost certainly not want
to know about contents insurance. However, do not despair: there are specialist insurers
who will cover both buildings and contents. Premiums will probably be around 10 to 20
per cent more; ask an insurance broker to get quotes. It’s hard, however, to get cover for a
period of less than three months.Tenancy Agreement
This agreement between you and the tenant (also known as a rental or lease agreement)
is the key safeguard of your precious asset, so make sure it’s done properly. If you are
letting through an agent, they will issue their own version. If you are letting privately in
the UK, you can buy off-the-shelf agreements from high street stationers or newsagents.
In the US, major chain stores like OfficeMax (www.officemax.com) do sell standard rental
agreements, but smaller outfits won’t carry them. Far better, however, is to get a solici-
tor to draw up a watertight agreement. Make sure you have agreed who is paying conten-
tious costs like water rates and council rates. There is usually no legal minimum period
to let a property, but there may be a minimum notice period if you wish to end a tenancy
agreement.Rent
When the tenancy agreement is signed, you or the agent will probably ask for a month’s
rent in advance, plus one or possibly two months’ rent as a deposit against damages or
unpaid bills. In the UK you can insist that the tenant sets up a standing order for rent04: Tying Up Loose Ends:House