Turning your home into a money maker
During the sixties and seventies boomers often lived in co-operative housing or in communes. So many of us were hell bent on rejecting the lifestyle paradigm of our parents. Each and every nuclear family nestled into a split-level with a huge backyard on a suburban street without sidewalks was vehemently eschewed.
When I first moved out of the family home, I moved into a commune with six other students. We pooled our money for rent and food and the lucky guy with the yellow Volvo shared his automobile with the rest of us. It worked for us. As a child growing up with two older parents, my brother having already started a family of his own, I relished co-habiting with others my age.
The house was in Ottawa and we called it “Moon House.” In the living room there were two mattresses on the floor serving as sofas. Pride of place was reserved for a stereo with enormous speakers flanked by a boards and brick wall of record albums. Most nights we listened to Grace Slick, or Bob Dylan or Phil Ochs.
With little money to spare, except for tuition and books, we made our own fun. In certain ways it was the happiest time of my life and it left me with a taste for something other than one family/one house living. Today seniors are looking back at their youthful experiences and figuring out how to parlay them into inventive ways to thrive.
First things first. For many, living on pension income and meager retirement savings, cash flow is the number one issue. But there are options and exploring new strategies to turn homes into income is an intelligent and resourceful way to age in place, while enjoying the company of others.
Across Canada, co-op houses are rising up. Most are originated by women who don’t wish to spend their senior years alone or confined to a retirement home. The co-ops are divided into separate apartments with shared kitchen and laundry facilities although some do offer private kitchens. All in all, it doesn’t sound much different from how we lived in Moon House, almost fifty years ago.
Another model is the new share economy. Airbnb ran a report this April of the burgeoning senior host community in Vancouver. “The report noted that Airbnb has seen a rapid embrace of home sharing by the older adult community. Additionally, older adults are some of the best-reviewed hosts, and they are also some of our most adventurous travellers.
These trends hold true in Vancouver, where senior hosts are the fastest-growing age bracket and have the highest typical annual host income compared to other host brackets. While just 6 per cent of Vancouver’s 5,000 active hosts are seniors, they are the fastest-growing group in Vancouver among all hosts, with an almost 40 per cent increase over the last twelve months.”
The average host, according to Airbnb, earns roughly $12,000 annually.
Think about it. With OAS running at $578.53 monthly and the average CPP payment at $643.92, it’s extremely difficult to make ends meet. Harder yet, if a senior is depending on a combined survivor’s and retirement pension where the average monthly cheque is for $842.17.
When Airbnb breaks out the hosts by gender, there are far more female senior hosts, 64 per cent, than senior male hosts, 36 per cent, with senior females the fastest growing sector in the Vancouver.
It’s no wonder. Hosting can double a senior’s income, and for some, hosting guests is a source of company and a way to keep busy, without venturing from home in increasingly expensive cities.
Another option is spare room sharing. According to the Business Insider website, baby boomers in the U.S. have 3.6 million spare rooms that could help fix the millennial housing crisis.
“Millennials, the largest generation in U.S. history, are rushing into cities in search of good jobs and opportunities. But many are finding upon their arrival a shortage of affordable housing options. As people 20 to 36 years old struggle to pay their rent and still come up with disposable income, real-estate company Trulia has found in a recent analysis, a surplus of empty rooms in the homes of baby boomers — some 3.6 million rooms. If they decide to live together, this could present lucrative opportunities for both age groups.”
According to Trulia, renting out an extra room could offset a senior’s living expenses by $14,000 USD a year. The data is based on the top 25 rental markets in the U.S. including Boston and Cambridge, Oakland and San Francisco and New York City.
This information points to a cash flow solution for boomers with spare rooms in Canadian university cities such as Vancouver, Toronto, Ottawa, Hamilton and host of other locations where students housing is in short supply as universities and colleges struggle to catch up with on-campus accommodation.
When I was living with my daughter in our home in Oakville, I turned one floor into a suite for a student. I advertised in the rent to student website for Sheridan College where I taught. Over five years, my student tenants were responsible and honest, and their monthly rent helped me provide the extras to enhance our lifestyle, such as sending my daughter to summer camp or our travels to Europe.
The rock upon which this income strategy is built is a home, with room for others. Whatever shape that experience takes, is a personal choice. But just when it seems that you’ve run out of choices, new ones have a way of presenting themselves.