Strategy 107 of 107 · new for the five-year plan
Rent to a family displaced by a disaster whose insurer pays
What it is
After a covered disaster, homeowners policies often pay displaced families' additional living expenses for months.
Steps
- After a covered disaster, homeowners policies often pay displaced families' additional living expenses for months.
- List a furnished home or unit with insurance-housing placement services and local agents.
- Send the net rent to principal.
Repeat: Each placement.
Measure: Net monthly rent.
Try it in the calculator Enter its amount in "Monthly non-income amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Placements are temporary.
- Wear and tenancy rules still apply.
Who it fits
Married couples, Grandmas and grandpas (62 and over), Single, Average household
Needs
A spare room, unit or space to rent
How predictable
Depends on people or program rules (tenants, family, IRS records, lenders)
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (married couples). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: after a covered disaster, homeowners policies often pay displaced families' additional living expenses for months.
Suppose it brings $600 a month on principal from this strategy, not from the paycheck. The loan would be paid off in 16 years 3 months instead of 30 years, saving about $196,219 in interest. To finish in five years, they would still need about $3,374 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sources and more information
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
- IRS: Free tax preparation for qualifying taxpayers (VITA and TCE) irs.gov
- NAIC: Find your state insurance department content.naic.org
Related strategies
- 95. Teacher forgiveness or disability discharge for student loans
- 94. Public service loan forgiveness, then roll the payment
- 93. Let your employer pay student loans tax-free, then roll that payment
- 92. Owners of an S or C corporation: get reimbursed tax-free for home office and mileage
- 91. Ministers: a designated housing allowance
- 90. Run a licensed adult family home