I try to buy properties in desirable areas, and take great care to maintain them, so quite often I get applications from ex-pats (workers from other countries that have been transferred by their companies, often for several years). Should you consider renting to an ex-pat? The answer is complicated.
There are several universal issues that you’re likely to come across:
- Your tenants could be transferred out at any time. Of course this could happen with any tenant, but it’s much more likely to happen with ex-pats. I had one family transferred after 3 months! A safeguard for this situation: be sure to include an “ex-pat” clause in your rental agreement, which should include a two-month notification period, or at least a one-month penalty. This protects both the renter and you, and will help you recover the costs associated with re-leasing the property.
- They won’t be able to provide a credit history. For this situation, be sure to confirm, in writing, with their company what their salary is, and how long the job is likely to last. At least you’ll know that, theoretically, they can afford the rent.
- You likely won’t be able to check with a prior landlord about their history, reliability, and the like. They most likely own a home where they have been transferred from. And even if they did rent, it can be difficult to track down a property manager with pertinent information.
In addition to these factors, be sure to investigate the business scene in your area. Do companies in your area transfer people around? Do they have offices in multiple countries?
Fifteen years ago, when I started my business, I aimed my rentals at ex-pats. I found that they were wonderful, reliable, and trustworthy renters. But things seemed to change around 2015. I was still getting renters from all over the world, but it wasn’t the same. They suddenly were negotiating prices. And, more importantly, they were only staying for the one year and not renewing.
Here’s what changed: companies went from giving “ex-pat packages” to offering “local terms.” In the past, the company would pay for everything. Even give bonuses to the transferring families! They were given either housing allowances or the equivalent bump in pay. Now, with “local terms”, these families were no longer getting financial assistance. They are now treated like everyone else, and that means that they pay for their own housing. And for some reason they believe that it’s smarter to buy a house in the area (it isn’t — I’ve done the math) than to continue “throwing away money on rent.”
So should you rent to ex-pats? Be sure to check the business policies in your area, so that your expectations are in line with reality. And realize that current conditions can change! That said, I’ve only had two bad experiences with ex-pats (the family that was transferred after 3 months, and another family whose children felt the house was their personal coloring book). I’ve met wonderful people from all over the world. In total, I’ve rented to families from Scotland (at least 6 families or individuals), Norway (3), Germany (2), Canada (2), Finland, England, Indonesia, Japan, South Korea, Venezuela, and Argentina. I’ve learned about many cultures, made friends, and overall have had my best renters. So I would not hesitate to rent to an ex-pat. Just be sure to understand the inherent issues.