Getting the Most out of Your Home

As our life expectancy approaches 85 years, many seniors are working past retirement age, a trend that could continue as the coronavirus pandemic upends the traditional labor market.  Many say that they will never retire.  Like millions of retirees, many are working and earning good money, while others are using their residence as an added source of income.  In addition, today’s rapidly expanding freelance economy gives folks more opportunities for income post retirement than ever before.   

Working past retirement age is a rapidly growing trend -- and the collapse of the traditional labor market because of the coronavirus shutdowns is only likely to accelerate it.  In fact, seniors are the fastest-growing segment of the U.S. workforce, according to the Bureau of Labor.  

Dozens of factors, including healthier lifestyles and rising longevity, are fueling the trend.  Longer healthier lives make seniors better able to work and supplement their retirement with passive income, like real estate, which will help them avoid outliving their savings and provide a balance to working longer hours.

The so-called gig economy -- powered by online platforms that connect people with jobs, renters, and clients -- also plays a significant role.  Where the traditional workforce arguably discriminates against older workers, online platforms are “age-agnostic.”  In fact, many platforms cater to boomers that have both experience and assets.

At Finance of America Mortgage, one of our subsidiary businesses owns a site called Silvernest.  Silvernest aims to find full-time renters for seniors who have extra space.  

The site helps older homeowners find renters, matching vetted renters with compatible empty-nesters using eHarmony-like algorithms to match needs and wants and find points in common.  

But this trend is much bigger than seniors.

Even the gig sites that don’t specifically cater to seniors are beginning to welcome the idea of renting space in their oversized homes as an excellent way to build safe, sustainable income without much risk.  For example, many rent their entire house through Airbnb, while others rent them out as staycation rentals via sites like HomeAway, VRBO, Booking.com, TripAdvisor, Homestay or OneFineStay.  Almost everybody in America has had a paying roommate while in college or just starting out.  The need to share the single-family home is almost unquenchable.     

Naturally, money is the motivating factor for allocating a part of your home to renters.  

Steven Dietz, a former FinTech banker, founded United Dwelling in Los Angeles.  United Dwelling is on the cutting edge of helping homeowners of all ages “create a home in your backyard” by converting their one-car detached garages to ADU’s or Auxiliary Dwelling Units.  Steven and the team at United Dwelling have pioneered a way for homeowners to earn income, increase the value of their home, and strengthen their communities all in one. 

Social distancing and stay-at-home orders due to the coronavirus will have interesting implications as well.  There has been a dramatic drop in occupancy at WeWork.  But can the idea of bringing strangers together in Ubers, hip commercial settings, homes or other shared spaces survive social distancing?  Although a shakeout is evidently underway, plenty of real estate experts say sharing has established its appeal to both entrepreneurs and large companies and will survive in some form after the pandemic.  

This trend has broad implications for homeowners, Realtors, Lenders, Homebuilders, buyers, and tenants in the future.  What motivates some will be the ability to create supplemental income for an asset they already own.  Entrepreneurs will yearn to try something completely new and make efficient use of available space.  Fueled by sheer passion, others will want to help solve affordable housing or cure homelessness.  For me, I see this as a significant opportunity to capitalize on an emerging trend and help people make important financial decisions with respect to the use of their nest egg.

Bill Dallas - Finance of America Mortgage