Going Home - to Stay or Not - that is the Question?

Part of our “two star” retirement plan includes growing our net worth by buying and renovating a house or two (or three) over the next 10 years. I have done this many times with good success and know I can usually increase the value of my homes by $60K-$150K after expenses. I am pretty good at design, sourcing affordable and unique materials, knowing what NOT to spend money on, and coordinating various contractors. The hardest part is finding a house in original condition with great potential that also has the potential to generate income. The rental income provides travel money without dipping into our savings. Then, when we are done travelling we can renovate, live in a nice newly renovated house, and when we are ready to travel again, we can sell it and start all over again.

I have three rules I have always followed when buying a house:

1) I have to get the house for a very good – below market value – price
2) I have to be able to make good rental income on it
3) It has to be the ugliest house on a nice street

We lucked out last summer and found a perfect property in a superb, lake view location, that really needed some love. We did some quick renos to it to put in the basement suite, and we found some tenants for up and down before we left in October, with plans to return home at the end of March 2018 to start the big reno. Within three months of being in Mexico though, we decided we wanted to travel longer, so we applied to BC Health Services for the two year away plan they offer. Once every five years BC residents are allowed to go away and live somewhere else or travel for up to two years and maintain their coverage. Upon returning there is no waiting period to be covered at home. The only rule is that you cannot come home during that two years for more than 30 days. So when we come home in two weeks, we either have to leave again within a month, or give up our two year out of town coverage.

We are not sure what to do, as our "plan" has not exactly worked out so well. Our main floor tenants quit paying rent shortly after we left and trashed the place. Then the basement tenant did an exit in the night and avoided her last month’s rent. We decided then to hire a property manager who was pretty good at finding good tenants but shortly after they moved in there was some water problems and both sets of good tenants were moved out. By the time we paid the manager and the disaster clean-up crew, we basically have made no money on the property. All in all the house will have been vacant for five of eight months, the grass is dead, the trees and bushes need pruning, we have to renovate the bathroom when we get home, and I am pretty sure our new neighbours hate us and think we are slum landlords.

We will arrive home on July 22, and if we want to continue our travels, we can only stay until August 22. So in 30 days we have to meet our neighbours and convince them we are not bad people, prune our trees, clean up the yard, fix the master ensuite, and try to find decent tenants we can trust. We are not feeling very confident that we can manage all that. The temptation to just give up and stay home is very strong. However, there is a bit of a glitch to staying home…

We have already bought and paid for September and October at great ocean front places in Puerto Vallarta and we have a deposit down on our pickle ball place in Bucerias for November 01 onward. We can get out of Bucerias as there is a 3 year waiting list to get into that place, but we are not inclined to walk away from the PV accommodations we have already paid for.

As an alternative to longer term renters, we are considering looking for House Sitters to live there just until next spring. The advantage to House sitters is we can have them there short term without having to follow the new BC residential tenancy rules – which are not very landlord friendly. The downside, of course, is that we will be living on our savings instead of on our rental income and I am just not sure we can afford to do that.

Flexibility has become a necessary factor in this two star retirement. Situations arise and plans have to change. (Not to mention we have changed our minds regularly about what it is we want to do next.) All of this is O.K. because we are retired, we are free to do as we please for the most part, and we are loving life - whatever challenges it brings.