Thursday, May 14, 2009 at 12:55
Hi Lynnie,
Some of the decisions will depend on where your
home is (ie. is there strong rental demand?) and how much (if anything) you still owe on a mortgage.
I would strongly advise against selling up your
home to buy a great big rig simply because this is an irreversible decision... the value of your
home should generally increase in the long-term but your rig won't - after fresh bread, there isn't much that loses faster than a nice new 4WD, a big caravan and loads of accessories. If all your money is tied up in a nice rig, you may not be able to sell it for enough to buy yourself another
home (if you end up needing to).
I would advise against selling your
home to buy an investment property simply because you will lose so much in agents fees and stamp duty etc. Having said that, there are speculations that property prices could drop further over the next year or so. If you are prepared to gamble on this, you could sell your
home now and buy an investment property (or two) when you think the market has "bottomed" and hope that this will more than cover the losses (stamp duty, agents fees, etc.). Unfortunately, it's impossible to know when the market has "bottomed" - you can only see it in hindsight.
Some more points to ponder:
* If your rent your
home, it will be exempt from CGT for up to 6 years (you will pay CGT from day 1 on investment property)
* Eventually your
home will not be your
home anymore and will have someone else living in it regardless of your decision now
* You can rent on month-by-month basis so you could return within a month (at most) if you needed to
* Some (not all) people reach retirement and then require more frequent health care (certainly not wishing this on you!) - you may be "forced off the road" as you said, and have to return
home
* Your
home most likely has a lot of money and potential "tied up" in it - too much to just leave it in mothballs.
Many people approaching retirement have property in very desirable locations - you may have lived there in the same house for many years so even if it was "on the fringe" when you purchased, it is probably inner suburbs by now. This means:
* easily rentable at a healthy rate
* rental return will be high compared to the money that you have put into the
home
* If you raised your family there, chances are someone else may want to too
I don't want to answer your question - everyone's circumstances and preferences are different - I just want to throw in some things for consideration to help you make your decision. Seeing a financial adviser will also help you to make a better informed decision.
If you want my opinion, I would rent out my current
home (my bias probably shows in my comments above!), but I don't know your whole situation. I wish you the best of health and safe travels - you will meet many more people on the road who are travelling just like you're planning to do, some you will meet again and again - I hope you make some great friendships along the way.
AnswerID:
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Follow Up By: tim_c - Thursday, May 14, 2009 at 13:02
Thursday, May 14, 2009 at 13:02
Oh, forgot to mention the possibility of a "reverse mortgage" if you want to keep the
home but need the cash. Speak to any bank or financial advisor and they'll be able to explain it to you.
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632435