Homeowners are Taking in Boarders to Find Extra Money Now
Getting by post-recession
Americans are getting more and more creative when it comes to finding money now. The employment rate is still high and the jobs being created are still sparse. That leaves a nation of consumers who have to find their own ways of making money to cover bills. For over 18-months now, the recession has had a hold and a heavy affect on the nation. Although the recession is over, according to experts, some true signs of recovery most likely won’t be seen until mid-2010 at the earliest.
More and more consumers are looking to non-traditional methods of generating cash. Second jobs, freelancing and taking in boarders are all viable options for a financially hurting public. In earlier years, taking on boarders was thought of as a risky move that only the most desperate utilized. Today it’s becoming a more popular choice for those looking to cover their mortgages.
Mortgages and boarders
According to RealtyTrac, in 2009 there were a record number of 3.96 million foreclosures in the country. Add to that another 7 million who lost their jobs and that could mean the number of foreclosures is still going to rise. Consumers are resigning to do whatever it takes to make their mortgage payments, and that includes renting rooms. Offering a non-homeowner the luxuries of a home at a discounted price could work out well for people. It’s a good exchange and lets the homeowner cover their mortgage payment while giving the renter a place to stay that they normally couldn’t afford. There are some cautions however, and here are some of the major concerns:
- Due diligence. It would be nice if consumers could trust other consumers, but today that is not the case. The good news, though, is that the internet allows people to do research on any applicant. Running a background check can give homeowners an added sense of security. Remember that the person renting will most likely have access to all areas of the home when the owner is gone. It’s important for homeowners to be secure with their choice.
- Is renting necessary. All homeowners should ask themselves if renting really is the only option to making a mortgage payment. There are other ways of finding money now that the government stepped into the lending world. Modifications, refinancing and short sales are all viable options for any homeowner to at least explore before deciding on getting a renter.
- Legality. Homeowners should check with local laws for their neighborhood, condominium or subdivision to make sure that there are no rules banning non-related renters. The association should be able to provide the necessary paperwork to assure homeowners are sticking to the law.
- Consider the costs. Ideally, a renter should have a separate entrance, bathroom and bedroom. However, that is not always possible. Homeowners should consider what their options are in terms of slight modifications. Could an office with an adjoining bathroom be turned into a renter’s quarters? Could a basement with a kitchenette double as a rec-room and separate living area? If the renting situation is particularly short-term or would require too hefty a renovation, it may be more reasonable to lower rent and settle for the space available.
- Organize taxes. There are rules regarding declaring rental income, and every homeowner should be well versed. All homeowners should talk to their tax advisor to make sure forms are in order when they file their paperwork.
Renting in 2010
Renting a room can be a practical option for a homeowner having financial difficulties. There are some cautionary measures to take, but it can bring in extra money now when things are tight. A good background check and some research can serve them well and save them from financial disaster.