Strategy 52 of 107
Rent the home for a season and live somewhere cheaper
What it is
If you travel for a season (snowbirds, a summer away, a work posting), rent the home furnished for those months.
Steps
- If you travel for a season (snowbirds, a summer away, a work posting), rent the home furnished for those months.
- Stay with family or in a cheaper place; the rent minus your costs goes to principal.
- Use a written lease and screened tenants.
Repeat: Every season.
Measure: Net seasonal rent after your own lodging (enter as a yearly amount).
Try it in the calculator Enter its amount in "Yearly amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- More than 14 days of rent is taxable, and expenses must be split.
- Wear, damage and short-term rental rules.
- Tell the lender and insurer; some policies exclude rented homes.
Who it fits
Grandmas and grandpas (62 and over), Married couples, Single, Higher earners
Needs
Any homeowner with a mortgage.
How predictable
Depends on people or program rules (tenants, family, IRS records, lenders)
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (grandmas and grandpas (62 and over)). 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: if you travel for a season (snowbirds, a summer away, a work posting), rent the home furnished for those months.
Suppose it brings $6,000 once a year on principal. The loan would be paid off in 17 years 11 months instead of 30 years, saving about $173,949 in interest. To finish in five years, they would still need about $3,488 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
Related strategies
- 50. Sell baked goods or preserves from your kitchen under your state's cottage food law
- 49. Pet sitting and boarding from home
- 48. Rent out a car, trailer, tools or gear you rarely use
- 47. Amend the last three years of returns for missed deductions and credits
- 46. Claim every tax credit you qualify for and send the refund to principal
- 45. Run childcare and commuting through pre-tax workplace benefits