Overcoming The Distance Hurdle
Moving interstate or from country to country is harder than moving round the corner in the same suburb, or to another suburb in the same town, which is one of the reasons most people don’t move far when they move house. Some people lose money, especially if they move from an upwardly mobile area to one where prices don’t change much, and find themselves unable to buy back into their original location if they change their minds. What steps can they take to make this process more financially secure?
Many people like to buy their new place of residence before they make the transfer. This way they experience a smooth transition from one home to another – with the emphasis on ownership and avoidance of renting at all costs. They see no problem arising from selling their old home and cutting their ties with their old life.
While such a strategy may be organised and efficient in the short term, it doesn’t always turn out to be the most successful in the long run. Many people find it hard to carry out property inspections when they live far away. Often they give themselves too little time to find a new home. They forget that moving round the corner means that a lot of the market knowledge they need is already taken for granted (busy roads, proximity of services, exposure to adverse season-dependent weather conditions to name a few). Many find that the property they bought to start with seems less desirable as their local knowledge deepens.
Others find it harder to settle into a new life than they anticipated. The schools aren’t as good as the old ones, clubs and other networks don’t exist or simply don’t seem as familiar as what they left behind, the weather is too windy, wet, hot, cold – or any of the hundreds of reasons people find for not settling into a new place that is simply not “home”.
Those who have no choice – the ones who have to stay because they have been transferred and are under contract – eventually settle in, but just as many are in a position to change their minds and many of those wish they had kept their options open.
Those who decide to move back to where they came from could have reduced the financial cost of moving by not selling their home and buying another one – only to do it all over again when they return to where they came from. In hindsight, many realise that they could have chosen to rent temporarily while they explored their new territory.
Selling up before moving becomes especially likely to cause heartache if the area left is an area of greater capital growth than the area of re-location. Buying back in becomes difficult if prices go up faster in the original location than in the new one.
Naturally, not everyone decides to move back to where they came from. Some simply realise that in the hurry to get settled they chose the wrong house or the wrong area in which to buy, that round the corner or in the next suburb would have been more convenient, more appealing, more likely to go up in price.
Of course, retaining a home, renting it out and eventually selling it at a distance poses its own set of challenges. But many people find it’s the conservative option – the one more likely to maximise financial success and offer the greatest number of options further down the track.