Bankrupt or Boarder? Which Will You Choose?

September 26th, 2008 • Related • Filed Under • by tisha

The economy in America is in a tailspin right now and so many people are left feeling dizzy and confused about what to do just to survive. Some of the biggest concerns arising are from homeowners who are afraid of losing their homes because they can no longer afford to live in them or pay the monthly bills.

Many homeowners will consider selling to get out from under their mounting debt; however, with the slump in the housing market, selling may be the last thing you want to do to keep your head above water. Financially strapped families will simply not be able to afford to sell their homes. Some may consider moving out of their homes and renting their place to make some money but along with renting comes a long list of considerations as well as financial changes in insurance and local zoning laws. Renting may end up costing more money than you would be making as a landlord. Plus, the added responsibilities of keeping tenants pleased with repairs and maintenance is both draining and time consuming.

So what other options do homeowners have when it comes to keeping up with the bills and keeping their homes?

Consider a boarder. A boarder is someone who essentially rents space in your home. If you have an extra bedroom or a finished basement, you may be able to find someone to pay you rent for the living space as well as make contributions towards shared expenses, such as food and utilities.

Because there are so many people losing their own homes, finding a boarder may not be as complicated as you think. Apartments and other rentals will not be able to meet up with the demands and plenty of folks will be actively looking for a place to live. If you are considering taking on a boarder, the first rule of thumb is a concern for safety. It probably isn’t the wisest move to openly advertise a room for rent to strangers. Instead, start asking friends and family that you trust for referrals to help spread the word. It is likely there is someone in your own community that you are comfortable with to share your home.

Before agreeing to meet with any perspective boarders, sit down with your figures and see how much you need to recoup in boarder fees. Keep in mind you are not renting the entire house to a person so do not expect a boarder to pay hundreds of dollars for one room and the use of a kitchen. After a price has been established, write out a list of do’s and don’t for a new tenant. Starting out with a solid foundation and clear expectations of a new living arrangement will be beneficial to both parties. Never assume everyone else lives the way you do.

When interviewing potential boarders, do not shy away from asking for information. In this day and age, conducting criminal background or credit checks is common and can help weed out problem boarders. If you have a few people to select from, a simple questionnaire to address certain issues such as pets, overnight guests, work hours, and smoking may be helpful in the decision-making process. If the potential boarder is already a close friend, have a frank discussion about expectations because living together can damage even the best friendships.

If you have contemplated taking in a boarder but are not able to find a boarder on your own, it may be worth your while to research the Homesharing Program through St Ambrose, which is a nationwide program developed to aid people interested in taking in a boarder. The agency will conduct background checks, drug and alcohol histories and other research on potential boarders. They will also ensure that homeowners aren’t headed towards foreclosure.

Taking on a boarder means a lot of life changes and new responsibilities. If you are interested in getting the extra financial support by renting out some of your living space, make sure you have considered all of your feelings about privacy, conflicts, and space sharing before making the final decision.