Personal Finances of an Expat – A 4-Part Series Part 2

Part 2 – Budgeting for Housing.

This is the second article of a 4-part series aiming to give you tips on how to be financially ready for a life abroad. If you have not read the first one on how to budget for a visa, you can access it here.

Once you have your visa in hand, you have to think of where you will be living. From my experience, it is really hard to find long-term housing before leaving. I’m not saying it’s impossible, but it is harder than if you were in the country. Often, the landlords are not confident to start the process if they haven’t met the potential tenant. On top of this, pictures and descriptions online can sometimes be misleading and one thing you don’t want is to sign a 6-month or 12-month contract without having visited the property previously and you also need to consider the neighborhood. If you have no idea where to start, it’s always a good idea to wait to be in the country before house hunting. Saying this, it is not a bad idea to do some preliminary research on different areas and on what is on the market. You need to understand what you want and what you can afford.

For England, I found that SpareRoom (good if you are looking into house sharing and finding flatmates) and Rightmove are decent websites to search the UK housing market. The prices will definitely depend on where you want to live. London is by far the most expensive city to live in. The average rental values can fluctuate from about £530 in the North East of England to £1600 in Greater London. Most of the time, landlords will ask for the first month in advance and for a deposit that will be given back to you when you leave the property at the end of your contract if everything is in order. The deposit is often equivalent to one month’s rent. So, in effect, you have to pay two months’ worth of rent when you sign the house contract. You should also keep an eye on the prices and what you get for them. Some landlords will offer “all-inclusive” rental prices (internet, gas, electricity, water, taxes will all be included in the price) whilst others won’t. Rental insurance is also generally comprised in the rent price. You can ensure your valuables, but you don’t have to ensure the house or the flat itself as the landlord will have their own insurance for it.

Landlords also generally want to see your job contract as a proof you’ll be able to pay the rent. It’s almost essential to have a job offer if you want to have access to long-term housing. Sometimes this can be difficult if you have just arrived in the country and are not sponsored by a company – finding a job can take a few weeks. You have to think to add the cost of renting a hotel, hostel or Airbnb to your initial budget and to estimate how long it will take before you have a job offer.

For example, in 2015, I shared a big house with 5 other people in Newcastle Upon Tyne, in England’s North East. The rent was £375 per month and I had to pay a deposit of £375. It took me about 3 weeks to find a job. The house was already furnished, and the rent also included the internet, gas, electricity, water and yearly taxes, which I found a lot easier than having to open accounts with the different providers.

Then if you think housing in England is expensive, wait to see the New Zealand prices! A big difference is that you have to pay rent weekly. The national median weekly rent is now about $515 per week. Rental prices will once again differ depending on the location and will be more expensive in the big centers like Auckland or Wellington. Overall, I found the process of renting a house in New Zealand similar to what I experienced in England. You have to have a job contract beforehand, leave a deposit (they call it a bond), you can find furnished or unfurnished houses. As an example, in 2017, we rented a 2-bed furnished townhouse in Hamilton, the fourth-biggest city in New Zealand, for $420 a week. This price didn’t include internet, gas, water and electricity but included the house insurance and taxes.

Because renting a house long-term is a big monetary commitment, you must really think of what you can afford in your new country and that is why budgeting becomes so important. Rental processes are sometimes slightly different than what we are used to in Canada and something worth mentioning is that in both England and New Zealand there is no 1^st of July rush. You can rent a house and move in anytime of the year! I hope reading about a real-life experience will help you with your research and budget. The next article of this series will be on expat means of transport.

Cynthia Côté

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