Model home made of money

Tech can turn an extra room into extra $$

When Irene Carr-Zalusky and her husband Paul moved to San Diego 15 years ago, they found a property with a cottage in the backyard that made a perfect “mother-in-law” suite for her aging parents. But her parents eventually moved to Washington State to live with another sister.  When Irene retired in 2017, it occurred to her to rent the space out.

First she tried renting to a friend, but it didn’t work out. Unexpected visitors came and went and the water and electric bills rose alarmingly. One of Irene’s sisters suggested Airbnb. Two days after Irene brought it up to Paul, he’d created a listing, and it’s produced a steady source of income since. “We don’t depend on it,” she says. “It’s kind of a nice savings for us.” Bonus:  friendships with visitors from Brazil to Beijing.

Converting extra real estate into cash is not a new idea. Boarding houses were common in US cities in the 19th and early 20th centuries:  young people have frequently relied on having roommates, particularly in cities. Now, economics, longevity, and the desire for companionship has made cohabiting increasingly common among seniors. In a report last year, Pew Research Center said that the number of Americans over 50 who are cohabiting has grown 75 percent since 2007….and technology makes it easier than ever to do it online with sites like the ones listed below.

Do it yourself?

Martha K., a retired recruiter in Montclair, NJ, started renting out her third floor around 2005, after a divorce. Her children had also both gone to college. “It was sort of spooky being in a big house by myself,” she says. 

Since this was three years before Airbnb started,  she posted on Craigslist, the online classified advertising platform that Craig Newmark started in 1995. Martha drew on her recruiting skills to assess potential tenants. “I tried to have as long a conversation as I could on the phone,” she says.  If she was comfortable, she would invite them to her house to look at her third floor. (Note: experts say it’s best to meet potential roommates in a public space, like a coffee shop.) Martha also checked references. She hit gold with her first tenant, a female graduate student, who also became a dear friend. 

However, when her last tenant went into a diabetic coma, Martha had it with being a landlady. “I told him, if you can’t take care of yourself, I’m not comfortable leaving you in the house,” she says. She’s now looking to move to a house with lower property taxes.

Craiglist 

Craigslist is free, except for broker listings, and it automatically routes you to the right geographic area. You don’t have give out your real email, because Craigslist provides a masked email for communication. Watch out, though:  you may be overwhelmed with the number of responses to an ad and you must screen your potential roommates yourself — and the number of Craiglist housing horror stories are legion.

Senior Homeshares

A nonprofit service started in 2015 to connect older people using an online questionnaire and algorithm, Senior Homeshares is also free. It is geared to long-term roommate relationships. It has an extensive help section that emphasizes safety and provides useful links like this homesharing agreement on WealthHow. “I advise everyone to be as completely upfront as possible,” says Stephanie Heacox, founder and Executive Director of Senior Homeshares.

“If you would rather die than live with a Republican, you can say that.” (Discrimination by race or sexual orientation is not allowed.) Heacox advises that a homesharing agreement be explicit. Some homeowners offer a discount to roommates willing to offer services like grocery shopping.

Silvernest

Like Senior Homeshares, Silvernest matches roommates using an algorithm, but while it markets mostly to seniors, Silvernest will also match younger roommates with older ones. Silvernest charges a one-time $50 fee for users with a room to fill, which includes a background check. Then, it offers two levels of monthly service. For $10 a month, it will draft a lease, collect the rent and provide a “homesharing expert” to help iron out any roommate wrinkles. For $15, it adds a legal concierge. The monthly services are cancellable anytime. 

Airbnb

A logical option for a senior with extra space who wants to dip their toe in the water, Airbnb charges a 3 percent fee and collects and disperses the money. The hosting agreement includes $1 million of property and liability insurance. It may also appeal to more outgoing hosts, who like to interact with visitors, or who want to block out dates for any reason. On the other hand, you have to clean the guests’ room and change the sheets.

Considering home sharing? Consider these tips 

  • When looking for a permanent roommate, meet them first in a public place.
  • Check out local ordinances. Silvernest CEO Wendi Burkhardt says that living with up to three “unrelated parties” is legal almost everywhere. Key word: almost.
  • Take the pulse of your neighbors or homeowners association. You could run afoul of the current anti-Airbnb backlash.
  • Check with your accountant about rules for reporting income.
  • Be upfront in your listings. Whether on Airbnb, Craiglist or a service like Senior Homeshares or Silvernest, be clear about what kind of roommate or lodger you want, and also about any deficiencies in your property, like steep steps or a shared driveway.

Have you tried a homeshare?  How did it turn out? Let us know in the comments, and try our survey to learn what everyone else thinks about this idea!

 

Would you consider a homesharing agreement?

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