This summer I had a fantastic experience exploring Southern Africa. But what was definitely one of the most amazing trips of my life was also clouded with issues. My condo, which I had been renting out, was now not only vacant but also vandalized…twice. I spent the entire fall trying to pick up the pieces. It has definitely been one of the most stressful times in my life. So as I prepare to close on the sale of one of my condos and free myself up a bit, I’d like to share the lessons I’ve learned so far.
Property Managers: The Luck of the Draw
You can do a ton of research to find a good property manager, but unfortunately you really won’t know what you’ve found until you actually work with that person. I own two properties in two different states. One property is managed by a woman who has been a Godsend. She has made living overseas and owning property while away manageable. The other property is being sold because I can’t find a good property manager to save my life. I’ve gone through a few, all promising the world, and in the end I was screwed over big time. Property managers are your eyes and ears while you’re away so it’s important to have someone that you completely trust. That person must be honest and have your best interests at heart. They must also be an excellent judge of character in order to find you a decent tenant. The property manager should also be strong so that in the event the tenant is not working out, they know how to get them out without them damaging your property or skipping out on the rent. I found out the hard way, despite many promises and reassurances, that some property managers have no clue what the present condition of your property is. If I had to do it again, I’d only be comfortable having my property managed by or within a short distance from a family member. I also found that having property in a small town is easier than a big city. It might not command the same rent, but for me, it has been way less of a headache.
Not All Mortgage Companies Are Easy To Work With
You have zero control over who owns your home loan. While you may start out with a company that you have faith in or have had a good experience with, without notice it can be sold. My Bank of America home loan was sold to Green Tree. I can honestly say it’s been the worst experience I‘ve ever had dealing with a bank while overseas. It would take forever to get someone on the phone and when they would attend to me they didn’t seem to want to actually help or know what they were doing. I also learned that “www” doesn’t necessarily mean World Wide Web. Imagine trying to login in to your account via the internet only to be blocked because you’re out of the country. I had to invest in a proxy server just to be able to check my loan balance and recent payments.
Be Prepared for Some Late Nights
Making calls back home requires dedication. For me, being 13-12 hours ahead of Eastern Standard Time in the United States is a headache when you actually have to talk to someone during business hours. I frequently have to stay up until 9 or 10pm just to start making phone calls. If I’m calling someone on the west coast of the United States that becomes 12-1am. And that’s just to start. Imagine being on hold for an hour at that time of night or worse, being disconnected after being on hold for a long amount of time. It’s torture. And even when everything is going well there are still businesses you will need to call from time to time; mortgage companies, your bank, tax offices, property managers, homeowners associations, insurance companies, etc.
Beware of the HOA
A homeowners association can be great if it functions well and you have a voice. But you lose that voice when you cannot attend meetings or your vote is lost in the mail. I’ve seen my HOA dues more than double since I’ve been living overseas and I can’t do a thing about it. Well I’ve tried, and of course it required some long nights of being on hold and trying to get a live person to answer my questions.
So Why Do It?
With all of that being said, there are still benefits of owning property while you are away. If it’s not rented long term you can use it as a place to stay during stateside vacations. If it is rented then it is generating income for you or the tenants are helping to pay your mortgage. It also does help offset your tax liability. Even though many expats don’t pay tax, once your income hits a certain threshold you are responsible for paying taxes. Having a mortgage and interest fees helps with that. Homeownership is also still a great source of retirement income. If you can protect your investment from afar and the property retains or increases in value then it’s definitely worth it.
Are you an expat with a U.S. based home or rental property? Comment below and let me know how it’s worked out for you.