Every year I speak to homeowners planning an extended trip overseas, a secondment interstate, or maybe a year-long lap around Australia. Rather than leaving their home vacant, many look at the rental market and reasonably conclude that leasing the property for twelve months makes financial sense.
However, renting out your own home for a defined period is quite different from owning a long-term investment property. Before making a decision, it’s worth considering a few of the practical realities that come with becoming a landlord, even temporarily.
Your Timeline May Not Match The Tenant’s
This is probably the first consideration, and one that is often overlooked. If you’re planning to return in exactly twelve months, you’ll likely be seeking a fixed-term tenancy that aligns with your travel plans. While that sounds straightforward, tenancy arrangements don’t always run according to schedule.
What happens if the tenant breaks lease after nine months?
Under Queensland’s current break lease provisions, the compensation payable by the tenant may only amount to a relatively small portion of the remaining lease term. If there are only three months remaining before your planned return, you may find yourself with a difficult decision to make. Do you attempt to secure another tenant for a very short tenancy, or do you absorb a period of vacancy that wasn’t part of the original plan?
The shorter the remaining term, the fewer options available.
On that note too, the vast majority of tenants vacate when required. However, any plan that relies on obtaining vacant possession of a property by a specific date should include some contingency.
What happens if a tenant requests additional time?
What happens if a dispute arises?
What happens if formal termination processes need to be followed?
These situations are uncommon, but they do occur. If your return flights are booked, your belongings are on a shipping container in a lot, and your family is arriving home on a fixed date, even a short delay can become stressful.
Having a backup plan is prudent.
Furnished Or Unfurnished?
This is often where temporary landlords face their biggest decision. If you’re travelling for twelve months, what happens to everything currently inside the home?
Some owners elect to place furniture into storage and lease the property unfurnished. Others leave furnishings behind and market the property as furnished accommodation. Neither option is inherently right or wrong, but both come with consequences.
A furnished property may appeal to corporate tenants, interstate relocations and temporary workers who are specifically seeking shorter-term accommodation. In some cases, that can make finding a tenant easier. On the other hand, every item left behind becomes another item that can be damaged, worn, misplaced or require replacement.
Even where a tenant takes excellent care of the property, twelve months of use will rarely leave furniture, appliances and household items in exactly the same condition they were before.
Managing expectations is important.
The Property May Need More Maintenance Than You Expect
A tenant’s obligations and a homeowner’s expectations are not always the same thing. Tenants are required to maintain the property in accordance with their obligations under the tenancy agreement and legislation. That does not necessarily mean the property will be maintained to the standard you would personally maintain your own home.
This is particularly relevant where properties have extensive gardens, lawns, pools or specialised landscaping. If returning home to a well-maintained property is important, professional gardening and pool servicing may be worth considering. While it increases the cost of holding the property, it can significantly reduce the amount of work required when you return.
The Ethical Consideration
There is also a broader question that many homeowners may wrestle with. If you’re leasing a family home for twelve months with the intention of moving back in at the end of that period, you are knowingly entering into a tenancy that has an expiry date from the outset. Some landlords are uncomfortable with this idea while others point out that the alternative is leaving the property vacant during a housing shortage.
Reasonable people can disagree on where the balance sits.
My view is that transparency matters more than anything else. If a property is genuinely only available for a fixed period, being upfront about that from the beginning allows prospective tenants to make an informed decision. In many cases, there are tenants actively seeking shorter-term accommodation arrangements (eg. building, looking to buy, renovating etc).
Not Every Property Manager Will Be The Right Fit
One aspect that often surprises homeowners is that not every agency is geared towards short-term landlord relationships. Property management is generally structured around long-term client relationships. There is significant work involved in onboarding a property, preparing it for tenancy, leasing it and establishing systems and processes around its management.
If you know you’ll be returning in twelve months, have an honest conversation with any prospective property manager from the outset so expectations are clear on both sides.
Going In With Your Eyes Open
Renting out your home while you travel can be a fantastic financial decision. It can offset holding costs, provide additional income and ensure the property isn’t sitting vacant while you’re away. It can also be more complicated than many people expect.
The owners who tend to have the best experience are not necessarily the ones who avoid every challenge. They’re the ones who understand the challenges before they arise and have a plan for dealing with them. If you’re considering renting out your home while travelling, I’m always happy to talk through the practical realities, the risks, and whether it’s the right decision for your circumstances.