It’s a common belief that in order to set off on a long-term travel adventure, you need to sell EVERYTHING. And why wouldn’t you think that when the “About Us” section of a number of travel blogs mention they sold everything to travel the world. Of course, while that may be a great way to make your dream a reality, I’m here to tell you that this is not you can travel without selling EVERYTHING!
Kim & Rob living it up in Mongolia
“NO NEED TO THINK OUTSIDE THE BOX, SIMPLY REALISE THERE IS NO BOX.” -UNKNOWN
Don’t get me wrong, we (my husband, Rob, and me) sold almost all of our “stuff.” We don’t have anything in storage and are only hoarding two suitcases in my in-law’s garage. Oh, and of course I can’t forget our two precious dogs, Dakota, and Mia!
Our fur-babies, Dakota & Mia
But we too wanted to start spending more of our money on experiences rather than things, and now was a perfect time!
We currently have three houses we’re maintaining in Australia while we’re traveling the world for the next 12 months (actually 7 months, as we’re already 5 months in).
Rental Property #1
And after this year is up (it’s flying!), we’re looking to collect our couple of bags, our dogs, and move to the United States. Since getting married in 2008, Rob and I have been living in Australia, and now it’s time to go “home” for a while. It’s important to note that even upon embarking upon our next journey, we have no intention of selling our properties.
Rental Property #2
So how can we afford to do it?
First off, no, we’re not millionaires. We’ve all heard that debt is “bad.” And, I get it – there is a certain sense of freedom that comes with not having a mortgage. But what if you had a mortgage that was paying for itself? That’d be a different story, right? Well, that’s where the notion of “good” debt comes in. Without getting too technical, good debt is based on the premise that it “takes money to make money.”
And that’s our story! We’ve had two rental properties in the pipeline for several years. And, a year before we commenced travelling, we decided to switch our permanent place of residence to a rental property. At the same time, we moved in with my in-law’s to save some money – it just made sense.
Our old house – now, Rental Property #3
In reviewing our portfolio, we compared our outstanding loans against our rental income and expenses. Overall our properties are making a profit, which is an important part of our success with this model. The buffer is enough to cover periods of non-rental, repairs, water, rates and any incidentals.
In order to make this work on an ongoing basis, it is imperative to:
• Speak to a financial advisor (which, by the way, I am not)
• Understand your rights as a landlord (they vary from country to country and state to state)
• Regularly review interest rates (build a relationship with a broker)
• Find a good property manager (this is your main point of contact when you are away, so don’t skimp on this one)
• Invest in rental insurance (protect your assets)
• Ensure you have adequate cash flow (or loan structure) to cover any incidentals
Of course, there are a number of ways to “skin a cat” as they say. And I understand this approach may not be for everyone, but I thought it was important to share my personal experience to provide a different perspective on how you can live your dreams without sacrificing EVERYTHING you have worked so hard for!
—–
P.S. Be sure to check out 3 key steps on decking to travel – www.simplytravelled.com/fly-away-12-months-road
Disclaimer: You know your personal situation better than we do, so do what makes sense for you – we do not accept any liability.
