Longer lifespans plus smaller savings and escalating home expenses mean you’re probably not going to enjoy your golden years. At least, not in your own house.
But a new startup called Irene wants to help seniors stay in their homes for the remainder of their lives.
With Irene, seniors sell their homes at an extremely reduced rate to the company. In return, they can either stay in the home sans expenses (maintenance, homeowners insurance, taxes, etc.), rent it out or rent it back themselves.
“Millions of seniors who are homeowners have lots of savings in the house, but not outside,” founder/CEO Fabrizio Tiso tells Slate. “They’re what’s called ‘asset-rich, cash-poor,’ and as they adjust to retirement, their income reduces, and they can’t afford the house.”
What Irene can offer seniors depends on their financial situation. The company’s Safe Stay option, for example, is geared toward homeowners with low outstanding mortgage balances — an example would be a 78-year old retiree who owns a $300,000 house with no debt but $10,000 a year in home expenses. Here, Irene would pay $135,000 and own the property, but take care of taxes, insurance and repairs, and even offer an unspecified additional amount if the owner leaves early.
Meanwhile, the Safe Lease Back option offers a larger share of the home equity upfront; from there, the previous homeowner would then make “affordable” rent payments.
There are risks on both sides. A healthy retiree who sells to Irene might live an extra 30 years, with the company probably losing money in the long run. If, however, the homeowner passes away within a few years, this would — morbidly — lead to a profit.
As well, any children who were hoping to hold on to the property would be shut out. And there’s no guarantee Irene, like thousands of other failed startups, will actually last for decades.
Still, consider this a rather novel approach for seniors who want to enjoy their retirement and feel no need to pass along their legacy.
Top photo: American Advisors Group
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