During career shifts, your house doesn’t have to be a ball and chain. In fact, it can crank out extra cash.
When Jule Zacher, a 48-year-old software consultant, decided to take a new job in Silicon Valley last September, she was both elated and torn. The new position was terrific, but it meant leaving behind “a quintessential Toronto home, a beautiful house and yard that I had redone from top to bottom.”
At first, she thought about selling, but quickly realized she could make more money by renting it. “I can save that as a retirement investment, and defer any tax implication,” she says. She found CHBO, or Corporate Housing By Owner, a website that charges property owners a $279 fee to advertise to corporate relocaters. Within two weeks, she had a six-month lease with a tenant paying $5,000 per month, covering her expenses while she builds her new life in California.
Add Zacher to the growing list of accidental landlords. Some rent their homes outright, or just their basement; others are taking in boarders. What they have in common is that they’re suddenly sizing up their abodes as a source of cash, not just a place to put their feet up and watchDancing with the Stars.
Renting Your House
For many, offering a home as a furnished corporate rental is ideal, says Kimberly Smith, founder of CHBO:
There are plenty of takers. “People don’t understand how big a need there is for this kind of housing,” she says. “There are 100,000 travelling nurses at any given time, for example, while the Department of Defense moves 600,000 people around per year. There are divorces. Lots of people need short-term rentals.”
You don’t have to get rid of your stuff. Since these rentals are furnished, you eliminate the hassle of storage. (Many owners lock their valuables and knickknacks up in an owner’s room or closet.)
You get good tenants. Renters in this category are typically low maintenance. A traveling executive in town for a two-month project isn’t likely to care what color your dining room is, or throw noisy parties.
You get your house back whenever you want. While these short leases mean more work (since you’ll be screening new tenants frequently), they also add flexibility. “If you land a job and get back on your feet, there’s no need to wait months or years to get your property back from renters,” Smith says. The average length of stay is about 100 days.
Once you’ve begun screening tenants, “do background checks, and go through a very formal application process,” she says. “Google them. Ask for their driver’s license. Run credit and background checks. And do walkthroughs, including video inspections.”
(CHBO doesn’t do any screening, but it provides DIY guidelines on such details as insurance, accepting credit cards and researching tenants.)
Another option, if you’re willing to invest in renovations, is renting out part of your home. When Peggy Northrop, editor-in-chief of Work Reimagined, left a high-profile job at Reader’s Digest, she and her husband found themselves struggling with too much real estate. “For years, we had lived in the top three floors of a house in Brooklyn, and rented out the basement apartment. We had also bought, fixed up and furnished a home in Connecticut. Plus, we are helping my husband’s son with his apartment, as well as our daughter, who is in college now.”
At first, she says, “I kept thinking, `I can’t afford all these houses. I have to find a job that pays exactly as much as my last one.’” But what she really wanted, she decided, was more freedom—to consult, to travel, to start her own business. “And with my daughter gone, I realized we didn’t need to live in our house the way we had been.” The result? She and her husband are renovating the basement and moving downstairs, and leasing out the triplex. “By renting out just part of one house, I’ve found a way to afford them all.”