Temporary Leave

Written by Posted On Thursday, 23 March 2023 00:00

Okay, so you decided to take some time off and travel. You’ve certainly saved up enough money to take an extended vacation, so why not go ahead and take that ‘temporary leave of absence?’ Not many homeowners have the ability to take such an extended leave but there are many who do. Yet there are some questions that suddenly present themselves when considering the notion of packing up and walking out the door. At least for a while.

For one, who’ll pay the utility bills while you’re gone? What about your cable TV? What about other expenses associated with homeownership? With the convenience of online banking and auto-draft, this part can be easily accomplished. In fact, many already have their monthly bills taken from their accounts automatically so this won’t be an issue. So will you just leave the house empty while you’re gone? Probably not.

If your vacation is just for a month or two, leaving the house as-is most likely will be the preferred selection. Put your mail and newspaper on hold and you’re off to the races. Even if you decide to leave the lights on, it’s probably relatively easy to take care of the expenses with the home while taking your vacay. That’s how it’s done in most every instance. But what about a longer stay?

This is where things can take a few turns. Let’s say you’ve decided to take a cruise. An extended cruise, maybe even around the world.  Now we’re talking about an extended leave. You certainly don’t want to leave the house empty for that long. In this instance, It’s time to call your real estate agent and find a tenant who will rent the property during the length of your leave. The agent will identify prospective tenants, select them, collect the rent and maintain the property all the while you’re sailing away. This isn’t something you should try and handle while you’re chasing down a mimosa one morning on your cruise. Let the agent take care of all this.

Now, what about if you decide to leave altogether but keep the property as a rental? Again, an agent should be able to help with all this but suddenly your owner-occupied property is now a non-owner occupied property. It’s a rental. Rates are a tad higher for a rental property. Your mortgage agreement might not say anything about the implications of renting the home after you’ve owned it for a few years. (the lender will certainly care if you tell the lender you’re going to occupy the home with no intentions of ever doing so!) However, your mortgage agreement may have such a clause regarding approving renting out the home.

If you’re not sure, and many aren’t, pull out your original mortgage agreement and do some research. If you’re not sure, contact the lender. In fact, it’s probably best to contact your lender at the outset.

Rate this item
(0 votes)
David Reed

David Reed (Austin, TX) is the author of Mortgages 101, Mortgage Confidential, Your Successful Career as a Mortgage Broker , The Real Estate Investor's Guide to Financing, Your Guide to VA Loans and Decoding the New Mortgage Market. As a Senior Loan Officer and Mortgage Executive he closed more than 2,000 mortgage loans over the course of more than 20 years in commercial and residential mortgage lending. 

He has appeared on CNN, CNBC, Fox Business, Fox and Friends and the Today In New York show. His advice has appeared in the New York Times, Parade Magazine, Washington Post and Kiplinger's as well as in newspapers and magazines throughout the country. 

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.