How to travel with a mortgage

The Great Australian Dream: “A belief that in Australia, home ownership can lead to a better life and is an expression of success and security.” – Wikipedia.

Once upon a time, four walls and a roof to call your own was what people strived for. Now, with property prices the way they are, it’s less of a priority for a lot of people – especially if you also want to travel. It’s one of the dilemmas grown-up travellers face. Many feel a responsibility (myself included) to make some savvy financial decisions, such as investing in property. But making that commitment usually puts any serious travel off the agenda.

I bought my house when I was 24. Unlike those chasing The Great Australian Dream, it wasn’t something I’d thought much about. But the opportunity came up and I knew I’d be crazy not to. At the same time I was eager to travel long-term in the near future and I was determined that dream wouldn’t be a casualty of my new homeowner status.

Four years on and I’m making it work. Here’s how.

Know what you want and why

I flicked through property guides with two goals: I wanted a house and I wanted to travel. It was never going to be a choice of one or the other. That knowledge guided nearly every other decision. My house-hunting wish list looked something like this:

• The potential rent MUST cover the mortgage repayments: This was my primary consideration and trumped almost every other budget concern. If the house couldn’t pay for itself, I wasn’t interested.
• The property must appeal to potential renters: I was looking for three bedrooms if possible to attract families, a convenient location and low-maintenance garden or yard.
• The house must not require any major work or investment: Kitchens and bathrooms are expensive so they needed to be in good condition. I couldn’t afford to save to travel and sink money into the house. Any required work had to be minimal and low-cost.

Be prepared to change how you travel

Can you buy a house and still party in Europe for six weeks every year? Probably not. But you can still travel. Becoming a homeowner isn’t the end of your travels, but you may have to change the way you travel to accommodate your new financial obligations.

Sometimes the changes are small. Before I bought my house I was contemplating a month-long trip to Asia. It would have been cheap, but I decided I still needed to cut back a little more so it became a two-week holiday in Vietnam. It wasn’t a huge sacrifice, but it made a difference.

If you usually spend $2000 on a quick holiday, look at ways you could spend less. Visit Asia instead of Europe, stay in hostels instead of hotels, cook for yourself occasionally instead of eating out and cut back on your souvenir shopping.

Always have a safety net

Forking over a deposit and managing a mortgage are just the beginning of the costs of owning a house. Some are expected and some are not. It’s the latter that cause the most issues when travelling.

In the lead up to my departure from Australia, my hot water system died and an accident in the kitchen required new flooring and bench tops. Both events put a little dent in my travel fund, but at least I was working and still had money coming in. I just had to save that little bit harder. What would I have done if I was travelling?

When I was ready for long-term travel, there was only one way I could make it happen: A working holiday. Travelling for a long time while still finding money for council rates, water bills, insurance and tax would have been stressful. Instead, I chose to travel for a few months at a time and then work for a bit to re-stock the bank account.

I could have saved a lot of extra money before travelling, but I’ve found it easier to handle unexpected costs when there was some income either coming in, or on the horizon. Luckily, every time I’ve needed to spend money on the house while I’ve been away (air conditioner repairs and tenants who stopped paying rent) I have had a job. Finding extra cash while on the road would have been difficult and really taken the buzz off travelling.

Is it worth it?

It would be lovely to travel until I was penniless, and I’m envious of those who do, but my house is always in the back of my mind. I have to make sure I can afford to handle the unexpected.

It can be stressful. My tenants moved out at the end of last year, but because of the Christmas break my property manager hadn’t advertised for new ones straight away. I had to cover the mortgage payments while some were found. It turned out to be a couple of weeks, but it could have been longer. My property manager got a lot of emails from me asking how the search was going. Every week I paid the mortgage was one week less I could afford to travel this year.

I also have to remember to pay the bills that come in every couple of months. My parents open my mail and let me know what is due when, but I can never quite switch off from my responsibilities in Australia.

But it isn’t all bad.

I’m 28 and have spent the last two years working minimum wage jobs. Low pay and lots of travel is not how one sets up one’s life. But I can live and travel like this because I have my house – a good financial asset – back home. It gives me just a teeny bit of stability, which is a nice feeling when living like a nomad. I don’t have to worry about returning to Australia and starting from scratch.

Final words of wisdom

• If you are buying a house and plan to travel, keep that in mind from the beginning. Once you’ve committed to a mortgage you can’t afford – it’s too late.
• Whatever you think the house will cost you while you’re travelling – double it. It will never hurt to have extra money put away.
• Get a good property manager. I haven’t always had this and it has made some things a lot more stressful than they needed to be. But if your house is in good hands, it’s one less thing to worry about.