If you were house-rich and cash-poor in your grandparent’s day, you had few good choices. You could sell you house and, hopefully, buy something cheaper. Or you could get a “reverse mortgage” — a costly and controversial financial product that allows you to borrow against the equity your home.
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Today, the choices for the house-rich and cash poor are far more numerous and attractive. These choices range from renting out a spare bedroom on a nightly basis — or when you’re on vacation; getting a full-time renter; or even renting your home or garden by the hour as a location for events, photo shoots and movies.
Options for the house-rich
Birgit Schafer, for example, was worried about her finances a year ago, when she quit a job that she loathed and decided to strike out on her own as a consultant. While her business got off the ground, Schafer figured she could defray some of her costs by renting out the finished basement in her Colorado condo, which has its own bedroom and bath. But she wasn’t sure she wanted to manage the commitment of meeting and cleaning for a frequent stream of renters, as she have to do if she rented the space by the night.
She counsels cash-strapped older people about ways to stay in their homes, so she knew there were also longer-term rental options. She turned to a site called SilverNest to help find a renter.
(You can sign up for SilverNest here.)
Unlike Airbnb, SilverNest aims to find a someone willing to sign a long-term lease. Aimed at empty-nesters who want either extra money or companionship, the site is the eHarmony of the rental world, matching renter and landlord by location, personality and goals. The site matched Schafer with a woman close to her age, named Mimi.
“We emailed back and forth a little and set up a meeting for coffee,” says Schafer. “We were so comfortable talking together that I had her come right over and meet my son.”
Because Schafer was a little nervous about having a roommate, they opted to sign a deal that would allow Mimi to rent on a month-to-month basis rather than locking themselves into a longer-term arrangement. That was a year ago.
“She and I have developed a nice friendship,” Schafer says. “She even officiated my daughter’s wedding.”
Meanwhile, Schafer collects more than $500 in monthly rent and says she’s now much more comfortable about her prospects in retirement.
“This has been such a positive experience, I don’t know why I wouldn’t do this when I retire,” she says. “It may not pay the whole mortgage, but it certainly could pay for a nice vacation, or…I don’t know, whatever comes up.”
David Dellinger and his wife are employed full time, but their historic Los Angeles home is high maintenance. When Dellinger first considered renting out a room, the goal was to simply get the house to pay for its own repairs, he says.
Giggster specializes in finding movie locations — from empty lots and restaurants to mansions, gardens and beach houses — and maintains that renting to film producers is more lucrative than listing on a vacation rental site. Dellinger says that’s no joke.
“We make 10 times as much with this than we do with Airbnb,” he says.
In the past year, the Dellingers have rented out their house to movie studios and college film classes about 20 times, earning a cool $20,000, after costs and commissions. Of course, renting to studios is far more invasive than renting to travelers, too. The studios “pretty much take over your house” and sometimes break or scratch your property, he says. On the bright side, you don’t need to change the sheets.
“You don’t have to have the most beautiful home on earth to rent through us,” says Giggster co-founder Mathieu Goudot. “We just rented out an empty lot in the desert that has nothing but two antennas on it. They wanted it for a horror film.”
Typically, Giggster rentals are for a 12-hour stretch — say, from 7 a.m. to 7 p.m. Goudot advises homeowners to charge three to four times as much as they’d charge on a travel site, like Airbnb. However, there are also complications with renting your space to film producers that you don’t have with other types of rentals.
A film crew might be made up of 20 people, lugging around heavy equipment and lights, for instance. That multiplies the chance that some part of your home or your possessions could be damaged. Giggster requires a substantial deposit — about half of the rent amount — to protect against property losses. However, the site also counsels landlords to require that the production company get — and show you — a copy of their production insurance policy. If you have heirlooms that are priceless, it would be wise to either watch over them during filming, or remove them before the crew arrives.
If you won’t be on site when the production is filmed, you can also have Giggster provide a “site rep.” These reps are independent third parties, who will be at the location monitoring the production. Site reps cost $350, but this cost is borne by the renter, not you.
Giggster also arranges rentals of classic and luxury cars to studios for a similarly hefty rental rate. The site charges 15% of your gross as its fee.
Not wild about renting to the movies — or about having travelers stay with you?
Two other sites — PeerSpace and Splacer — offer to rent your home by the hour for photo shoots and special events, ranging from corporate meetings and bridal showers to fundraisers. The typical rental goes for $50 – $500 per hour.
In other words, you house just might make more per hour than you do.