"Boardvesting"
With Scott Mackey
Scott Mackey, Principal of RE/MAX Precision, continues on from his previous article on Rentvesting.
There is the similar model to that, which is dubbed as ‘boardvesting’. This is where people are moving back into their parents’ home or another family member’s home. This group is rather one of ‘first time buyers’ as they purchase a property to rent out rather than what we hear termed ‘first home buyers’.
Living with family while contributing to the household allows ‘boardvesters’, to put savings, along with the rent from their investment property, towards servicing a loan and also help with repair and maintenance costs that may be needed before tax time, when they can claim the tax deductions that they are entitled to.
The big difference between ‘rentvesters’ and ‘boardvesters’ is that the latter are paying board, generally to parents.
When you are boarding and looking to invest in a rental property, the lenders are allowing $400 to $1,200 a month as a living cost for you. If you were paying rent or paying off a home loan, this sort of cost would more likely be per week than per month. Not only that, living with family means you reduce all those extra household expenses like toilet paper and cleaning products, to name a few.
It’s not only young people that are evident in this group, but people who have to start over through, for example, divorce. Their housing needs may be different as a result of separation, so living with family and putting their share of a divorce settlement into an investment property may be a smart move; combining the rental income with a now reduced household income to build on.
They can then look for another home, perhaps with a new partner and combining two incomes.
Boardinvesting is something families should encourage with young adult children. The savings that can result from staying at home, generally with parents, while helping out with the work load and household expenses is a great leg-up and should be capitalized on if you have that opportunity.
This can be a win-win for families as a whole.
