By Victor Ochieng
The demands of life make it a challenge for many people to plan for their retirement. You’ll find many people still struggling in their retirement to raise income so as to live comfortably because they didn’t save enough. This challenge is especially alarming among African Americans. In a 2015 report released by The Urban Institute, it was stated that an average African American family has post retirement savings of $19,000 against $130,000 for the average white family.
What a huge challenge that is. One strategy believed to have the potential of turning things around is taking advantage of the blossoming sharing economy, where retired property owners have the option of home sharing as a way to raise their income.
According to Brooklyn councilman Robert Cornegy, over 1,000 households have been converted into Airbnb hosts within his locality. This shows just how much the sharing economy has become widely accepted.
Although the market is burgeoning, it’s not widely known yet and that means there is still a huge market to explore. A Pew Research Center report, Shared, Collaborative and On Demand: The New Digital Economy, states that 78% of Americans have used these shared platforms, except that only 11% have used them to stay for a night. This means there is still 89% that’s yet to spend a night in an Airbnb or similar platforms.
What this means is that retirees can now easily use their properties to earn extra income without necessarily digging into their 401ks among other savings.
Before diving into home sharing, however, it’s important to fully understand the rules that guide it.
Real estate attorney, Yvette A. Hinds Wills noted that “The real question is whether Airbnb is something that will work for you.” She continues, “First of all, in the year 2010, New York state’s Multiple Dwelling Registration Law was amended [to clarify] what you can do. In a building that has three or more units, it is illegal to rent that entire apartment for less than 30 days. That is why the New York State Attorney General commented that over 75% of home-sharing [operations] in New York are being done illegally.” She, nevertheless, notes that short term rentals are allowed in one or two-family units, whether the owner is around or not.
Co-ops have by-laws that guide them and these should be well understood before making a move.
Laws keep changing as well and so you need to always be alert of any new legislations. You definitely don’t want to be on the wrong side of the law as that may lead to litigation that may eventually cost you dearly.
What do you do after completing the legal requirements needed for home-sharing? Ashley Warmington, CEO of Cozy Oasis, says, “The next step you have to think about is what you would want, if you were a guest in someone’s home. What kind of amenities would [guests] require? How would you like to introduce them to your home [and] neighborhood? Things like a bed, umbrellas, towels, sheets are all different parts of the inventory to manage your Airbnb or your short-term rental.”
She further points out that you’ll need to review your insurance coverage to know the things covered and those that are not. Ensure you have third party insurance cover, in case one of the guests get injured.