Your Home as Corporate Housing: It Just May Get You a Job
Earlier this week I did a piece on television about how many job seekers are frozen in place because they can't sell their homes to relocate for a new job.
More than a quarter of U.S. borrowers owe more on their mortgages than their homes are currently worth. We call that in a "negative equity position" or "underwater."
"I had an example last week of someone who was on the East Coast and there was an opportunity on the West Coast. Great paying job, and the family just could not afford to take a $250,000 loss on their house. That employee, prospective employee had to forgo that opportunity," recalled Gary Burnison, CEO of Korn Ferry International, an executive recruiting firm.
I decided to dig a little deeper into this phenomenon and found another fascinating story: Temporary corporate housing is seeing a boom, and it's not just in big rental apartment buildings. Job seekers are actually renting out their own homes as corporate housing, so they can take a job somewhere else and not have to sell at a loss.
"I probably get a call on an hourly basis with people who have a new job, have new job opportunities, know that there are job opportunities in another area, but have this home, which is a burden around their neck that they don't know what to do with," said Kimberly Smith, president of the Corporate Housing Providers Association (CHPA). Smith is also the founder of Corporatehousingbyowner.com, a site that helps homeowners find corporate renters. "If you find that right person at the right time, the ability to rent your home fully furnished is a huge emerging real estate trend that is hot."
Sixty percent of the properties listed on Smith's site were rented as a result of the owner's relocation needs. And demand is booming, especially as corporate apartment rents climb due to strong demand.
"Just this morning, I got a call from an individual in a random town in Minnesota. They had listed their property for rent two days ago, and now have their property rented for six months," said Smith, but she added there is something else far more troubling pushing the corporate rental demand:
"I was having lunch with an executive head hunter the other day, and they were stating that corporations are picking their second or third choice for job applicants because they don't want to be stuck with someone who might be underwater with their home. Corporations can discriminate against you based on your financial status, and being in a home that's underwater is a perfectly good reason for an employer not to hire you."
Corporate renting is one alternative.
It may seem strange, swapping your house for someone else who has been dislocated from their home, but these are strange times.
The upside is that instead of moving your family into some sterile corporate apartment box, you can move them into a real home that might remind them of better times.