After living in Europe for over four years, we recently returned to live in Australia. As our old home was never going to accommodate our enlarged family, our intention was always to rent initially whilst looking for a home to purchase. It didn’t take long for us to realise we should have sought to buy a home in Australia before returning.
1. Renting is expensive
Housing in Australia is expensive, but it is not only expensive to buy a home in Australia, it is also expensive to rent a home in Australia. As at December 2016, the median rent in most capital cities was around $400 per week for a house, and in Sydney it was $500 per week.
Every week the rent gets deducted from our bank account, I just think how that money could be financing my own home rather than someone else’s.
2. Property Condition Reports & Rental Agreements
We rented for the entire time we lived in the Netherlands and moved house once. As a tenant, renting in the Netherlands had a number of advantages – no property inspections during the lease, no over the top property condition reports and overly critical property managers on final inspection at the end of the lease. I also liked the fact that we walked through the house with the property manager at the start and end of each lease agreeing the condition of the property.
My first rental agreement in Australia in about 15 years, and I was confronted with about 5 pages of conditions of what I wasn’t allowed to do whilst living in the property, and then on the morning our sea container was delivered to our new house, we were given a 116 page property condition report with about 500 photos detailing the supposed immaculate condition of the house at the commencement of the lease. Now, I have been a landlord now for almost twenty years and have never seen a property condition like this. Perhaps it is just this property manager (or maybe it is a new trend in property management), but it certainly doesn’t bode well for a long, happy relationship with our property manager, and certainly highlights to me the sooner we move into our own home the better.
3. Property Inspections
As our property manager kindly reminded me when I collected the keys, see you in about 3 months time for your first property inspection! All I can hope for is that she schedules the property inspection the day after our cleaner comes, as otherwise with our 3 young kids running wild, our house is going to look like a bomb went off in it when she comes for her inspection.
4. You often can’t get your kids into school until you have a house in the catchment area
We arrived in Australia in the middle of the school term and were eager to get our kids started in school as soon as possible. Whilst we knew the general area we wanted to live in (and therefore which government school we wanted our kids to attend), our kids couldn’t start at school until we had a signed lease agreement and proof of utility connection. (Note some schools won’t even allow your kids to attend school until you are physically living in the catchment area). So even, when we found the house we wanted to live in, we still had to wait another week for our lease application to be processed, for our lease agreement to be signed, and for us to have additional evidence of a contract with a utility company.
Now as we begin our search to buy a home in Australia, we are constrained to the catchment area of the school our kids are now attending. The last thing we now want to do after up-rooting our kids from their friends and school in the Netherlands is to move them to another school within six or twelve months.
Had we begun our research on where to live and bought something before we arrived we would have had much more flexibility in choosing the best house for us.
5. The wait for internet…
The suburb we wanted to live wasn’t due to receive NBN until 2019, so on the internet front the best we could get was ADSL2+. So after shopping around for the best deal, I was then confronted with this message from our ISP “Please note that the standard lead times from the carrier to process a Connect Outstanding line order is 20 – 30 business days.” You have to be kidding me. Not only can I not access internet at a developed world speed, I have to wait around a month before I can get it. Now fortunately for us, it took substantially less than their standard lead time, but a 20-30 day wait for internet every time we move house is extraordinary.
6. No security of tenure & Moving
Unlike in The Netherlands where it can be difficult to evict a tenant, in Australia tenants have no security of tenure beyond their existing lease. And even if the landlord is willing to extend the lease, there is no guarantee that it will still be at the same weekly rent.
And then, if you are unable to extend your lease before you have had a chance to buy a home, then you will need to pack up your life again and move to another home.
As a long term property investor I have come to the realisation that tenants with pets make fantastic tenants. Also as most landlords would prefer not to have tenants with pets, tenants with pets generally pay a slight premium on the market rent, but better still tend stay in a house much longer than other tenants.
Although I swore off having dogs again after giving away our two dogs to friends when we moved to Europe, my daughter (age 6) is constantly pestering me about getting a puppy. Whilst I now might be willing to get a dog, based on the immaculate condition of the house we are renting (and the new wooden floorboards), we won’t be able to get a dog until we either move into new rental accommodation or buy a home.
8. Putting up with …
After you’ve just signed off on a property condition report that you hope you have noted every scratch, mark and nail in the wall, you then realise that there aren’t enough picture hooks in the walls, or they aren’t in the right place. Then there is the inadequate number of power points, cupboard space, wardrobe space. Or, as we discovered, that the pots and pans we used to use on our gas stove can’t be used on the new electric induction stove.
And I haven’t even mentioned putting up with the ugly wall paper in the bedrooms, broken blinds in the living room, or an oven that doesn’t heat evenly…
9. Buying furniture to fit your rental home but probably won’t fit in your next home
And because there is insufficient storage or wardrobe space in the rental home, you then have to purchase more furniture (you never really wanted) which you will probably have no use for when you move to your next house or when you finally buy a home of your own.
Need Help to Buy a Home Whilst Living Abroad?
Michael and Richie are both founders and directors of Milk Chocolate Property Concierge. They understand first hand what it’s like buying property whilst living abroad. As two former expats that lived in North America and Europe, they have been buying, renovating and selling property in Australia for the past 10 years.
Milk Chocolate is a bespoke property concierge business that exists to buy and renovate property on behalf of expats living abroad. We are a true concierge service, taking care of every last detail of your property purchase. Using the latest technology, data and communicating in your time zone, they ensure the experience is rewarding and enjoyable one.
Mention the Australian Expat Investor when contacting Milk Chocolate, or complete the form below and you will be entitled to not only a free initial consultation to discuss your needs and to see if Milk Chocolate is right for you, but you will also receive a free voucher to the value of A$500 to treat yourself to a celebratory dinner in your country of residence when you sign up to use their services (and pay your initial fee).
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