Senior Women

Senior Women – Can Your Home Boost Your Retirement Income?

by Jen Turrell, Financial Personal Trainer for Senior Women, Contributor, Huffington Post

Do you think of your home as your largest asset and biggest investment? A lot of people do. The main problem with this is how hard it is to get that money back out if you need to use some of it and also want to continue to live in your home. In the past the main two ways to do this were to take a home equity line of credit out or to get a reverse mortgage on the home if it is paid off and you are retired. The problems with these options? Well, if you are retired and on a fixed income, paying the interest on the line of credit can be costly, and if you keep that reverse mortgage going long enough, eventually you no longer own your home. Thanks to new options like AirBnB and VRBO (that’s Vacation Rental By Owner), there are now some new ways to monetize your biggest asset and investment without incurring interest or risking the ownership of your home.

Guess what the fastest growing demographic for AirBnB hosts is right now? It’s senior women. I stopped to think about why that might be and came up with a few reasons of my own, but Richard Fertig, founder of Short Term Rental Secrets had the answer for me when he took time out of his busy schedule to chat.

Richard tells me that women in this age range are often empty nesters, as well as sometimes widows or divorcees. A lot of them have extra bedrooms in their homes, they are used to hosting, they enjoy the company and don’t mind cleaning up after guests. According to this report from AirBnB:

Women 60 and older are consistently the best Airbnb hosts in the United States. Senior women that host are providing better experiences than average hosts and are the best-reviewed hosts on Airbnb. Women 60 and older receive a higher percentage of five star reviews than any other age and gender combination among hosts. 63% of trips hosted by senior women resulted in a five-star review.

This says a lot about the growth and widespread acceptance of the platform. No longer is it for couch-surfing youths and people who want to get a few extra bucks from an old fold-out sofa in their basement or den. Now it is something that everyone uses, and not only that, it is now considered safe enough for our senior women to embrace en masse as a way to augment both their retirement income and their social lives.

Richard used to be a traditional landlord and still has some long term rentals in his portfolio, but for the past several years he has been working on his own 15 year plan for retirement based on the short term rental market.

If you are in a position to purchase new properties and set them up as short term rentals, then you can follow Richard’s 15 year plan too, which involves getting 15 year mortgages on the properties, using the short term rental income to pay the higher mortgage rate, and then in 15 years, each of the properties will get paid off and provide substantial income for your retirement.

If you aren’t in a position to buy property right now, but still want to get in on adding an income stream using your current home, you can rent out a portion of your home, a spare bedroom, or even a sleeper sofa in a den, and start making money right away. Richard has a few tips on how to succeed with your first listing.

1. Don’t hide ugly. If there is something about the room, the home or the trailer that you are renting (some people buy an airstream or other camper trailer and put it next to their home to get started), don’t try to take pictures that hide any undesirable feature. You don’t want your guest feel tricked and disappointed. Instead, point out the feature upfront and try to put a positive spin on it. If there is no possible positive spin, just disclose. Have young kids or dogs that make a lot of noise, put that right in the listing so the guests can decide to stay somewhere else if kid and dog noise bothers them. Live next to a hoarder who has junk in their yard? Take a picture of it and talk about the eclectic collection of collectibles next door. If you don’t let them know about things like this up front, you will very quickly find yourself with low customer ratings.

2. Take a lot of great photos. Show both the inside and outside. Do they get their own bathroom or will they share with you? If they are using the same bathroom as you, be sure to clear the area of your personal toiletries (both for the photo and when they arrive). Take photos of the road outside and nearby attractions, restaurants or other services that will be readily available to them when they arrive. If there is a coffee shop within walking distance, take a picture of that and let them know how long it takes to walk there. If your town has a cute and historic downtown, take pictures of that too. Is there skiing nearby? Or something else seasonal? Feature it all.

3. Make a pretty gift basket and feature this in the photos as well. You can include creatively folded hand towels, shampoo and conditioner samples, coffee from a local coffee house, candies from a local candy store, or coupons for some of your favorite restaurants in the area. A binder full of recommendations for restaurants, coffee houses and other attractions is helpful as well.

All my life I have heard rumblings that I can’t expect Social Security to be there when I retire. The fund is running out. It won’t survive the Baby Boomers retirement. Or it will have to drastically change the payment structure in order to survive for the long haul. The truth is that even today, few people can maintain more than a bare subsistence lifestyle on Social Security income. If you have an extra room in your home, a mother-in-law quarters, guest house, apartment above a garage, a garage that could be renovated into an apartment, or best yet an entire rental property, you might want to consider adding short term rental income to your life so you can save more for retirement too.