If you own your own home, relocating for a new job comes with challenges, decisions, and added costs.
Before you jump at the chance of relocating for work, we urge you to keep reading. Whether you decide to rent or sell your home is a cut-and-dry decision.
It is dependent on numerous factors, so you’ll need to make an informed choice about what financial path is best for your current situation.
It can be alluring to jump at the chance of a promotion, or a more exciting job offer with more money and increased responsibility. However, we urge you to take the time to weigh up the emotional and financial implications of relocating to another city for work.
Moving isn’t cheap, and there are often multiple expenses that don’t immediately come to mind. Moreover, if you are in a relationship or have children, then these expenses will get even higher. For example, have you considered such charges as canceling your mobile phone plan or your child’s dance lessons?
Once you add up the expenses associated with moving, you might be shocked to see the final figure. According to Zillow, employers spent approximately $90,000 to move an employee that owned their own home.
When deciding whether to keep your current home and rent it out or sell your house privately, knowing that you will be reimbursed for some or all of the following can significantly impact your decision.
Here are some of the relocation benefits often negotiated into a contract:
- Scouting fees
- Travel expenses
- Vehicle transport expenses
- Professional packing services
- Moving expenses
- Storage fees
- Real estate commission charges
- Canceled membership fees
- Car rental
- Temporary accommodation
In some cases, an employer might offer assistance with a down payment at your new destination. This is more common when moving to a city with a much higher cost of living.
However, be mindful of the tax implications of receiving a lump sum versus having your employer pay the expenses on your behalf. You don’t want to be liable for an unexpected tax bill.
Likewise, there is typically a contract agreement that stipulates how long you would need to remain with the company after receiving the benefits or risk needing to pay them back.
Renting your Home
Whether you are indecisive about a permanent move to a new city or looking to build equity, renting your home can be a viable option. Having a rental property can also provide passive income or set you up with a long-term and diversified retirement plan.
However, despite the opportunity to improve your financial future, renting isn’t always as straightforward and lucrative as many people believe.
For example, keep in mind that even the best renters are unlikely to maintain a house to the standard of a homeowner, so you first need to let go of some control.
We know a few landlords that take exceptional pride in their gardens and thus work the cost of professional landscaping services into the monthly rentals. If you are contemplating renting your house, answer the following:
- Can you separate emotion and look at your home as an investment?
- Is there a low vacancy rate in your rental destination?
- Will your strata or building council allow renters?
- Will you be relocating long-term, or might you be moving back to the same city?
- Would you rent your home furnished or unfurnished?
- Can you afford to maintain two homes?
- Do you have a financial buffer if your rental home is vacant?
- Can you afford a property manager?
- Do you have the expertise to handle lease agreements and evictions?
- Will owning a rental property impact your ability to secure a mortgage on a new home?
Suppose you have never rented out a property. In that case, we urge you to seek professional advice to ensure that all documentation, contracts, taxes, and insurance are in order, even if you intend to rent to a friend.
Selling Your Home
Putting your house on the market involves much more than calling a real estate agent or hammering a sign into the front yard. In our opinion, decluttering, packing up, constant cleaning, and living out of moving boxes are the most challenging aspects of selling a home.
If you can negotiate professional packing services into your relocation plan, then it will alleviate a significant amount of time and stress involved with the whole process.
If you are contemplating if you want to sell your home when relocating, then we urge you to ask yourself these questions:
- Do the figures not make renting conducive?
- Is the current real estate market favorable for sellers?
- Do you need the money to put towards a new home?
- Do you need to do any repairs or maintenance on your home before selling?
- Do you intend to use a real estate agent, FSBO, or a professional home buying company?
On rare occasions, companies have been known to offer home buyouts for some high-level executive positions or incredibly sought-after specialists. In the case of a Guaranteed Buy Out, or GBO, two separate appraisals are made to assess a fair market value for a home.
The company then buys your home and takes on the risk of selling it. Typically, this only happens after a home has been listed for a specified period of time.
The decision on whether or to sell your home or rent it out when relocating for work is purely personal. However, if you can negotiate a better relocation package, it might tip the balance one way or the other.
For example, a higher payout could mean that your children can finish the school year with their friends and join you when it is better for the entire family. Whatever you choose, it is integral to note that you do have numerous options available.