Would you share your home to earn income in retirement

LONDON: Forty-four per cent of surveyed seniors say they would share their home to earn an income in retirement.

Many Americans view owning a home as an investment that they can cash in on in retirement, but even homeowners who are nearing or in retirement feel unsure about their financial security. A survey of homeowners ages 55 to 85 conducted by Silvernest found that nearly half (49%) feel underprepared financially for retirement. As a result, some are looking for creative ways to earn income in their golden years. The survey found that 44% of homeowners in this age group would consider home sharing — mainly for the passive income — and 26% are more likely to consider it now than five years ago.

Home Sharing Makes It Easy To Earn Significant Income in Retirement

“A big reason more people are looking at home sharing in recent years is that there are very few options out there that let you quickly generate $10,000 a year in passive extra income,” said Riley Gibson, president at Silvernest.

“Even pre-pandemic, many Americans were concerned about their financial health, facing a cost of living that continues to soar and worried they don’t have enough stowed away for retirement, particularly now that retirement periods have near doubled with longevity,” Gibson said. “Those have been big drivers for people to start seeking out new ways to earn supplementary income. The idea of leveraging their homes as an asset is very appealing because they can basically earn the equivalent of what they might make at a part-time job, plus split utilities and other bills.”

Many Retirees Have Unused Rooms

Another reason that home sharing is popular is that it’s a great way to make use of an asset many retirees already have.

“There’s a huge amount of untapped inventory out there,” Gibson said. “Findings from an analysis of Census data suggest that there are as many as 33.6 million spare rooms across the country. If we look at the boomer population, 80% of them own homes, and many have unused space gathering dust that could be rented out to generate extra income.”

The Stigma Associated With Home Sharing Is Decreasing

In recent years, home sharing has become more of an accepted way to bring in passive income.

“We’re seeing people across all age groups more receptive to the idea of renting out space in their homes,” Gibson said. “A few decades ago, it might have come with a certain stigma, whereas it’s viewed as a lifestyle choice in this day and age.”

Retirees Can Benefit From the Social Aspect of Home Sharing

For some retirees, home sharing has an appeal that goes beyond the financial.

“Many older adults have experienced significant social isolation due to the pandemic and are looking for the companionship that comes from home sharing,” Gibson said. “This ranked second behind income as the biggest benefit of home sharing in our study. Another big draw is that they can often find renters willing to help around the house, such as helping change lightbulbs, running errands or driving them to the store, in exchange for a discount on their rent. This turns into a win-win, and we’re seeing more of these arrangements among our home sharers.”

Is Home Sharing Right for You?

If you’re among the 44% of Americans who would consider home sharing in retirement, take a closer look at some of the pros and cons to decide if it’s the right choice for you.

“The most obvious benefit is the ability to turn unused space in your home into passive income that is recurring and reliable,” Gibson said. “Over two-thirds of those we surveyed are actively looking for new ways to earn income in retirement and this is a highly attractive option.”

Then there are the benefits that go beyond earning passive income.

“Less obvious are the benefits around companionship and having someone around the house that can share the load when it comes to chores, maintenance and even things like grocery runs,” Gibson said. “We see a lot of older adults who want to stay in their homes as long as they can and stay independent. While it may seem counter-intuitive on the surface, sharing space may be one of the best ways to extend your independence.”