5 ms·

I love anything that creates more housing in the bay, but these are 30-year contracts! I can't even imagine getting into a 30 year contract with a company that

by Mizza 7y ago

I love anything that creates more housing in the bay, but these are 30-year contracts! I can't even imagine getting into a 30 year contract with a company that might not exist in 30 months. What happens when the start-up goes under, or gets acquired, etc? Is the loan made directly to a third party bank?

m463 7y ago
I think of the long-term solar contracts that make it hard to sell a house.
- offsign 7y ago
  this. anything that restricts or impedes what you can do with a home is a liability, not an asset. Up in SF, even partially tenant-occupied homes typically sell for a sizable discount. (also doubt that ~10k/year is going to make waves in the target market -- Bay Area homeowners with a back yard big enough to make this viable.)
  - ygjb 7y ago
    It could be very meaningful to older retired or semi-retired folks who have fully paid for their home and are looking for additional income but don't want to sell their house and leave their neighborhood. AirBnB used folks in that situation here in Vancouver to great effect when pushing for support for short term rentals in the local market.
    - sburl 7y ago
      A lot of people we've talked to have been in this exact situation. Older folks who have lived in their home for a long time and watched the cost of living rise while remaining on a fixed income from something like Social Security. Our hope with Rent the Backyard is to help people like this remain in their homes and have a higher quality of life.
- anonymous5133 7y ago
  100% agree. I was looking at buying a new home out here in Southern California. The new trend is "solar" on the homes....but the problem is that you don't own the solar when you buy the home. Instead you sign a contract with the solar panel owner and either buy the electricity from them or buy the panels outright....for an additional lump sum of 20k+. When you go to sell the home....you have to get the solar company involved and a bunch of other hassles. It is a bad idea to set it up like this.
kyrieeschaton 7y ago
The contract then binds the acquirer. The more problematic aspect is committing them to buy out the rental on sale of their house.
- sburl 7y ago
  Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard. It's worth noting that this is actually something the article wasn't great on. If your buyer is excited about continuing this agreement, we're happy to sign the unit over and even take a second position to a new mortgage so you don't ever need to pay anything. The great thing about a backyard apartment is that it is a permanent improvement to your property and increases the value of the home but you have a great point. We aren't the best short term partner. If you don't plan on staying in your home for a long time, making substantial improvements to your property doesn't make sense. We're focused on helping homeowners be able to stay in their home as the cost of living rises. We're committed to doing the right thing and turning away prospective customers who don't fit this profile.
  - fossuser 7y ago
    This sounds pretty cool - and would help a lot with buying a place (using the rented backyard ADU to offset the cost of the mortgage). I suspect the bank wouldn't care about this for mortgage qualifications, but it would be nice if they did.
    - sburl 7y ago
      Definitely a good use case! We make the borrower a bit more stable and creditworthy with a unit like this so that might be something for us to dig into in the long run
bbakerma 7y ago
Hi there! You can always choose to buy us out of the contract whenever you want -- we just ask for people to pay for the equity they have yet to earn in the unit. We will need to eventually give custodial ownership to a larger entity (think big bank) in the medium term to mitigate the risk of our company going under for the homeowner, such that, if the worst-case scenario happened to our company, the homeowner continues to make rental income as usual.
gwbas1c 7y ago
Sounds like a mortgage to me
- sburl 7y ago
  The part where you gain equity in the unit is a bit like a mortgage in that respect. This mortgage pays you though :) Also worth noting that you'll gain equity in the unit even if Rent the Backyard fails to find a tenant so you don't need to worry about the goalposts shifting.

by Mizza 7y ago

m463 7y ago

I think of the long-term solar contracts that make it hard to sell a house.

offsign 7y ago
this. anything that restricts or impedes what you can do with a home is a liability, not an asset. Up in SF, even partially tenant-occupied homes typically sell for a sizable discount. (also doubt that ~10k/year is going to make waves in the target market -- Bay Area homeowners with a back yard big enough to make this viable.)
- ygjb 7y ago
  It could be very meaningful to older retired or semi-retired folks who have fully paid for their home and are looking for additional income but don't want to sell their house and leave their neighborhood. AirBnB used folks in that situation here in Vancouver to great effect when pushing for support for short term rentals in the local market.
  - sburl 7y ago
    A lot of people we've talked to have been in this exact situation. Older folks who have lived in their home for a long time and watched the cost of living rise while remaining on a fixed income from something like Social Security. Our hope with Rent the Backyard is to help people like this remain in their homes and have a higher quality of life.
anonymous5133 7y ago
100% agree. I was looking at buying a new home out here in Southern California. The new trend is "solar" on the homes....but the problem is that you don't own the solar when you buy the home. Instead you sign a contract with the solar panel owner and either buy the electricity from them or buy the panels outright....for an additional lump sum of 20k+. When you go to sell the home....you have to get the solar company involved and a bunch of other hassles. It is a bad idea to set it up like this.

kyrieeschaton 7y ago

The contract then binds the acquirer. The more problematic aspect is committing them to buy out the rental on sale of their house.

sburl 7y ago
Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard. It's worth noting that this is actually something the article wasn't great on. If your buyer is excited about continuing this agreement, we're happy to sign the unit over and even take a second position to a new mortgage so you don't ever need to pay anything. The great thing about a backyard apartment is that it is a permanent improvement to your property and increases the value of the home but you have a great point. We aren't the best short term partner. If you don't plan on staying in your home for a long time, making substantial improvements to your property doesn't make sense. We're focused on helping homeowners be able to stay in their home as the cost of living rises. We're committed to doing the right thing and turning away prospective customers who don't fit this profile.
- fossuser 7y ago
  This sounds pretty cool - and would help a lot with buying a place (using the rented backyard ADU to offset the cost of the mortgage). I suspect the bank wouldn't care about this for mortgage qualifications, but it would be nice if they did.
  - sburl 7y ago
    Definitely a good use case! We make the borrower a bit more stable and creditworthy with a unit like this so that might be something for us to dig into in the long run

bbakerma 7y ago

Hi there! You can always choose to buy us out of the contract whenever you want -- we just ask for people to pay for the equity they have yet to earn in the unit. We will need to eventually give custodial ownership to a larger entity (think big bank) in the medium term to mitigate the risk of our company going under for the homeowner, such that, if the worst-case scenario happened to our company, the homeowner continues to make rental income as usual.

gwbas1c 7y ago

Sounds like a mortgage to me

sburl 7y ago
The part where you gain equity in the unit is a bit like a mortgage in that respect. This mortgage pays you though :) Also worth noting that you'll gain equity in the unit even if Rent the Backyard fails to find a tenant so you don't need to worry about the goalposts shifting.