Travel Australia with kids - rent or sell?

Discussion in 'Loans & Mortgage Brokers' started by bob shovel, 12th Feb, 2017.

Join Australia's most dynamic and respected property investment community
  1. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,955
    Location:
    Lower Blue Mountains
    Hi PC'ers

    Now i have a reasonable handle on this scenario having spentthe last 8 years travelling with the longest time in one spot being 18mths but I'd love some more feedback on the pro's and con's plus varying scenarios.

    This comes from many questions being asked on Travel Australia With Kids | Facebook
    The info and people on there are as reliable as PC;). 2 sites of the few on the interweb with trustworthy contributors :)

    What some key things to be aware of when making the decision to rent or to sell when packing up and travelling for 12mths

    A few things i think are important to get started are
    Current loan details - %, amount owing, exit fees
    Real estate visit to provide a approx value and also rent appraisal. Plus market information, shortage of rentals or lots of buyers

    As a guide amount I'd allow 30% of rent to cover pm, insurance, rates, water etc

    They should be seeing how much they'll need to pay out of their pockets if neg geared or how much they'll recieve

    Also refinance to free up any available equity which can be usedfor emergencies rather credit card.

    One issue is the refinacing before becoming an unemployed gypsy:D not quite music to a brokers ear

    Some people plan to leave for x amount of time and resettle in a new area so think it's best to sell regardless. There are positives for not selling, income or to keep long term as an ip.

    A big issue is the "a currant affair" tenant horror stories which are the default depiction of what tenants do to propeeties

    A approx average from feedback for costs for families travelling around sits at about $1000/week (fuel, accom, health insurance, car and van insurance, sunscreen, pina coladas etc;)). Some can do it much less (eg600-700) by free camping more and staying in the one spot longer using less fuel etc. But for a family starting out that's a fair guesstimate. Many do pick up work along the way in varying forms

    One thing that worries me for some families is doing a huge trip and gaining priceless experiences to then come back to civilisation and the daily grind to find that their old house is now worth $30k more and they've blown a chunk of their deposit
     
    Kassy, Perthguy and ellejay like this.
  2. ellejay

    ellejay Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,192
    Location:
    Kimberley and NZ
    I do get the appeal of the big road trip. I have no idea how families come back and settle into the 9-5 (I know I couldn't).

    Vetting the agent who will manage your house, and getting recommendations should reassure most people on the likelihood of nightmare tenants and what measures are taken to reduce the risk and deal with it quickly if it happens.

    Remote Aus is full of life changing work experiences that allow more integration with locals than sitting outside your van every day surrounded by other travellers from the city. Plus you'll have (sometimes very good) money going into your pocket instead of out. Kids get to mix with locals and benefit from the relationships you can make if you stick around longer in a town instead of doing tourist stuff only. This also makes it viable to hold onto your home if money's tight.

    I've met a few people on the road who sold everything to buy a van. I wouldn't do that myself but needs must for some.

    Either way, great that forums exist to help people avoid the pitfalls and work out what's best in their particular situation.
     
    EN710 and bob shovel like this.
  3. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    19,286
    Location:
    Sydney or NSW or Australia
    Just had a colleague take 6 months for a road trip with 3 kids <5.

    New 4wd & high caravan which they left parked if going off the track.

    They survived and would do it again.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

    Joined:
    9th Jun, 2006
    Posts:
    29,721
    Location:
    Australia wide
    Don't forget to consider capitalising of interest
     
  5. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    3,333
    Location:
    On a Capital and Income Growth Safari
    Can anyone provide reliable comparables for selling or renting kids? :p

    ( that's how the title of thread reads to me )
     
    inertia, tobe, EN710 and 2 others like this.
  6. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    19,286
    Location:
    Sydney or NSW or Australia
    Just use the net present value and discounted cash flow functions in excel - you're way behind if you rent unless the kid is a genius.
     
  7. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,955
    Location:
    Lower Blue Mountains
    we are struggling! only saturday and sunday for days off!! wtf!? :( and then there's all the jobs around the house before you can go out to play! and all the shops and "consuming" in the city is disgusting. I think we have a hangover from settling back in to a house:eek: ... and its only a small one compared to the jones's. the amount of crap we had in storage plus all the extra crap that's so easily available to buy!
    Coming back we have taken a 30-40% pay cut, plus working hours are 20% more:confused: its been 3 months and the wife has already raised the idea of going again! we planned to stay 2years:rolleyes:
     
    Perthguy and ellejay like this.
  8. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    Digging up and old thread but it's completely relevant to me at the moment. The sentiments in the post above echo strong, I was IP shopping last year but a change of Job early this year put a hold on that. The job isn't what it was sold to be and I'm over it, but after splitting with the GF of over 3 years (living together most of that) have realised I'm over much more than just the job.

    I own 70% of my PPOR and am fairy certain I want to just travel Aus............without at deadline would be great. It would just me and my dog, which makes things cheaper than a family but has it's challenges (ie what to do with dog in some areas, or if getting work on the road).
    Free camping would be done as much as possible, being remote is what I love so a capable off road vehicle is what I'm seeking. To help with the ability to leave my dog along for periods, I'm considering a 4x4 Truck (Canter or Isuzu) based motor home setup, not overly big (no longer than a dual cab ute, but self contained + importantly insulated and ventilated.

    So what to do with the house. If it fix it up a bit it's maybe $350k or so , I've got $64k in equity on the normal split and $84k in equity on an interest only that was intended for an IP. My thoughts are to rent and keep the house. Rent would be about $140+ a week over minimum repayments so it will more than cover itself. Once vehicle is acquired though, a large portion of the normal loans equity will be used up, meaning work on the road is a must. If travelling slow I recon I can do it for $400/week. A mate is telling me just do it for a year on the cheap, cheap vehicle (old Troop Carrier etc), don't work, then come back. But the post above is exactly my thoughts looking ahead, and by then I would have burnt $25k at least and not be in as comfortable position to set out with the aim of 'no return date'.

    As with most on this forum, although seemingly wanting to be come a hippy gypsy, A big part of me considers the future. Hence why keeping the house makes sense, or does it?
     
    bob shovel likes this.
  9. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,955
    Location:
    Lower Blue Mountains
    Mate! Go for it!
    400 pw defiantly doable

    Pick up work as you go but don't stress it. There's do much work around providing you'll give anything a shot

    You need to assess the property and market etc etc as they are all different. Selling may bea reasonable option.eg is it run down, is it easily rentable, has the market peaked or about to decline?

    i have seen wicked campers now do a variety of 4wds and roof top campers. Hire one and give it a try before you buy.
    I see your point with the izuzu/small truck but you'd need to check costs plus kitting them out.

    personally I'd be looking at a landcruiser ute. Roof top tent or a 10second tent. Plus a swag.
    Couple of awnings and built in kitchen draws etc. Pota porti and a pump heater setup for showers with a pop out change room tent thingo.

    I have dreams about this stuff! The simple life! :) Kids add so much extra complications! :confused:
     
  10. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    "The simple life" I hear ya. I've spent week stints just exploring and travelling with my dog in my Pathy (old R50) and it's liberating, but that 'gotta start heading back soon' always lingers.

    A friend is a property manager so I'll get her thoughts on how much I need to bring the house up to spec to get an OK tenant. I may have some options of friends who would rent it (has it's risksm maybe), have known them a very long time though. It definately needs some input though, not heaps spent, I've started painting so well less than $5k i'd say.

    I love the truck idea to make things confortable in any conditions and a more viable ongoing prospect. Stuff like this is out there, I'd put super singles (wheels, getting rid of the rear doubles) and decent tyres on it though Isuzu NPS 300 4wd Motorhome | Campervans & Motorhomes | Gumtree Australia Adelaide Hills - Cherryville | 1166857184

    But your simple option has merit and makes it easier to get into tight tricky places.
     
    bob shovel likes this.
  11. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    3,784
    Location:
    Australia
    Bah! Looks like torture. Gimme 5 star hotels all the way baby.
     
    willy1111 likes this.
  12. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,955
    Location:
    Lower Blue Mountains
    They are good set ups but they just look so bulky and may restrict you.
    What about a small camper trailer? Everything packed away. Decent kitchen and storage. Un hook when staying in the one spot for a while. Plus light to tow off road or beach etc
     
  13. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    Yes good point, most of the bulk is a bit of extra height and width. They can be surprisingly capable though, especially with a bit of setup. I have considered towing, though it has it's own challenges in technical terrain (especially if tight) when completely solo, but yeah the unhitch option is there. Similarly I've considered a slide on option, though ends up quite a lot of weight on the back of a ute. Having travelled Tassie for a bit in a hired poptop campervan (not 4x4 but it didn't know that ;) , internally self contained with minimal setup is such a cool thing, especially when the weather doesn't like you.
     
  14. strongy1986

    strongy1986 Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    894
    Location:
    VIC
    just spent 7 months in the camper trailer (towed by vx prado) and it' great for remote/ rural living/touring.
    Best thing is you can leave your camp setup whilst exploring.
    worst thing is the extra fuel
    our camper is soft floor but we just set it up anywhere in about 5 minutes. Only put the pegs in if its 20knots plus
    Not good for east coast though as you become reliant on caravan parks which get expensive (camper trailers stand out a bit in the beach car park..)
    With a camper trailer you spend a lot of time appreciating the outdoors. We noticed the caravaners spend a crazy amount of time in their van...
    only thing is that you need to chase the good weather as rain can dampen the spirits after a couple of days of non stop stuff
     
    bob shovel likes this.
  15. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    Sound awesome! Yes agree a camper is a great option for the remote areas. Though you comment on the east coast and more populated areas are exactly the thought I've had. Such a setup is very obvious you're 'camping', not so easy to just pull up and spend the night as it is in a contained motorhome (truck based) or contained slide on. I completely hear you on the indoors/outdoors thing, when remote the whole idea is to be outdoors. Though the weather plays a part. It's a balancing act.
    This slide on setup (would probably want a cruiser or patrol due to it's size) I thought was a good mix. Both internally contained and externally liveable, clear design.
    https://www.caravancampingsales.com...BkFmVq7y40JsWK23BPXKUGbDj5scFUEhoC1tQQAvD_BwE
     
  16. strongy1986

    strongy1986 Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    894
    Location:
    VIC
    looks pretty cool as you can leave it at camp and it's Iightweight
    negatives would be the price (good second hand aussie made off road trailers can be had for 4-6k)
    Money aside how much storage is there?? Need somewhere to put all the tools etc you might want to take. Roof racks are handy too

    bit to think about I guess
     
  17. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    There certainly is.

    With regards to finance. If i was to redraw enquity let's day 40k, and put into normal account, then months later normal wage income stops, onky sporafic income and repayments made (+ rental income) from normal account. Does it flag anything with the bank?

    I figure if min payments are being made, more than covered by rental income, should be a non issue?

    Perhaps a bunch of 5k or less redraws over a period would be smarter than a single huge one
     
  18. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    6,955
    Location:
    Lower Blue Mountains
    We never had an issue between work contracts. We were pos geared but from time to time there were repairs and extras costs so i just topped it up. They just want to see the repayments is imagine. Your other accounts shouldn't be seen by loan holder anyway id imagine
     
  19. Spoony

    Spoony Well-Known Member

    Joined:
    17th Aug, 2016
    Posts:
    176
    Location:
    Brisbane
    Yes I figured as long as repayments are made it would be fine, especially if they are more than minimum and there are deposits being made to the account also (ie from rent, other income sources I'm still thinking about :) . As it's just my PPOR loan account and normal bank accounts are with the same bank, hence asking first. I could start pulling equity and moving it over to another bank then bring it back into the loan bank I guess.
     
  20. John_S

    John_S Mortgage Broker

    Joined:
    27th Mar, 2017
    Posts:
    133
    Location:
    Gold Coast
    Just make sure to you get the second equity pull done before leaving your job, as you may not service otherwise!

    Redraw can technically be recalled by the bank at their whim so better to get the equity cash out as another separate loan split for your peace of mind vs redraw on existing loan