The Star-Ledger

More Homeowners Forced To Take In Boarders To Keep Up With Mortgage

The Star-Ledger — Monday, March 15, 2010

By Sean Sposito / The Star-Ledger

Jason Schachter is trying to renting out rooms in his Springfield home, pinning his chances of finding a roommate to a Craigslist posting. He sits in the newly renovated sunroom with his dog Moose. Newly married and with a steady income as a jewelry salesman, Jason Schachter thought he was done renting out rooms in his Springfield home. Sharing a kitchen with a stranger just didn’t fit his image of wedded bliss.

But two years later, unemployed and separated, the 35-year-old is back in the landlord business. He’s renovated his three-bedroom home with new hardwood flooring and a remodeled kitchen in hopes of attracting a tenant.

"I’ve already dipped into my life savings," Schachter said. "Eventually that is going to dry up. Whether it’s next month or six months from now, I don’t know."

As many homeowners struggle to stay afloat in a difficult economy, an increasing number have turned to renting rooms for extra income, housing advocates and experts said. Some are victims of unemployment, while others have been hard hit by furloughs or reduced hours. Even empty-nesters are taking in boarders in the hopes the extra cash will help pay their mortgage.

"I do this to survive," said Morristown resident Gail Behrle 53, who rents out the bedrooms once occupied by her two adult children. "I count on this money to live."

Since losing her job as a contractor for MetLife in May, Behrle said finding boarders for her four-bedroom home has become crucial. Like Schachter, she put in new hardwood floors and renovated the two bedrooms, which she rents for between $900 and $1,000 a month.

"I would definitely have to find all kinds of jobs to supplement my income right now, if I didn’t have this," Behrle said.

While data on just how many homeowners are in this situation are not available, advocates say they’ve seen an increase in the number of people looking to rent rooms.

Homesharing, a Bridgewater nonprofit that matches homeowners with those looking for shared housing, last year added 177 new clients looking to rent extra rooms — an increase of about a third from 2008, said Renee Drell, the agency’s director.

In recent months the group also expanded beyond its base in Somerset and Hunterdon counties and began serving neighboring counties — such as Middlesex, Union and Morris — because of increased demand, she said.

"Sometimes it is people who have lost their jobs, so their income has decreased," she said. "Sometimes it’s because of a death of a spouse, or a change in relationship,

KNOW THE RISKS

While taking in strangers can help out financially, it also poses risks.

Craig Wood, 41, of Knowlton is now looking for a renter in his Warren County home after he suffered two heart attacks late last year. The former mortgage bank branch manager said this isn’t his first experience with renters — in 2006 he got duped by a fake cashier’s check.

He said the tenant paid with a bad check, never showed up and then demanded a refund. "I got taken for forty-five hundred dollars," he said.

Indeed, renting out a house isn’t as easy as posting a listing online or taking out an ad in the newspaper. There are legal pitfalls, said Barry Guberman, a Monmouth County attorney, adding that homeowners must draw up a lease and sometimes make necessary renovations.

"When you become a landlord, obviously all the issues with landlord tenancy come into play," he said. "It’s going to make it difficult to sell the property if someone wants to get occupancy during the term of that lease."

One of the most overlooked items is perhaps the most important, he said. A certificate of occupancy issued by a municipality can cost anywhere from $35 to several hundred dollars, Guberman said.

"But people who are desperate for funds sometimes ignore that step," he said. "If the town ever finds out the penalties can be as much as $500 a day for each day of occupancy."

Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, the largest mortgage mediator in the state, said some in danger of losing their home might be better served by having friends or family move in and start paying rent.

"Sometimes folks are most comfortable doing it with relatives but we’re now seeing people doing it with friends of friends," Salowe-Kaye said.

As for Schachter, finding a new tenant hasn’t proven easy. Despite having run several ads since the first of the year, he still doesn’t have a candidate.

"I placed another ad this weekend," he said. "And now it’s going on two months, three months."

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