Wednesday, May 25, 2011

Income whilst narrow-boating

We are trying to decide where we shall receive our income when we move onto a narrow boat early next year, our options at the moment are....
1. Keep our house here in Australia and rent it out.
Pros ...we keep a nice house to return to and it should carry on increasing in value.
Cons... it is a old house and with a swimming  pool, which is very high maintenance and therefore too much of a risk and expense.  (So we have ruled out option 1).

2. Sell the house and buy a smaller town house or unit and put the rest of the cash into a term deposit which at the moment in OZ are paying approx 6.5%
Pros...should get a good rental return and property should increase in value and not a bad term deposit rate.
Cons...cost associated with renting out a town house or unit as in Strata fees, landlord insurance, rates and risk of property remaining vacant.  If the exchange rate between the Aussie dollar and British Peso swings the other way we could be go a bit short in the UK.

3. Sell the house and buy nothing and invest the money in a term deposit etc.
Pros...guaranteed income and safe. capital gain on property.

4.Buy a house or unit in the UK and invest the remaining cash in Oz in a term deposit etc .
Pros...the income on the UK rental will not be affected by currency swings, as we will be living in the same country as our investment. If we buy in the UK the property could increase in value and if the exchange rate swung the other way it would be a double whammy effect if we return to live in OZ.
Cons...we don't  know the UK housing market... ??will the English property market carry on dropping.

So there you go!  What to do ?!  Of course the other thing is we don't know if we will return to OZ to live after our little adventure, but that will be another post.  :)


  1. The uk house market is falling but not sure it will fall much further, you may time it just right at begining of next year. and say you soend two years on boat would be unlikely prices would have not risen,

  2. Hi Sydneysiders,
    We have looked at those options too. We won't have much left after paying for the cheaper house we bought (which we will rent out when we go) and buying a boat and putting aside enough to live on for a couple of years. We hope we won't need to use it all but don't want to have to come home before we're ready simply because we run out of money.
    We've had a look at real estate in the UK to see if there's something we could afford as a rental property. The problem is not knowing the areas too well (mightn't be such an issue for you?). We've seen a couple that had tenants already and the return was better than we get here in OZ. There is also the issue of selling again if necessary - the market's not so hot over there at the moment, is it.
    It's a little different for you guys too as we intend to come home to live. We don't have a time limit and if we were to find work and love it over there we'd stay longer than a year or two.
    Decisions... decisions....
    Elly and Mick