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Rent the Backyard (YC S19) wants to build a studio apartment in your yard

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Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#91

Post by sburl »

gonehome wrote: post #82
sburl wrote: post #56

Earlier quoted context omitted.

Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard. It's worth noting that this is actually something the article wasn't great on. If your buyer is excited about continuing this agreement, we're happy to sign the unit over and even take a second position to a new mortgage so you don't ever need to pay anything. The great thing about a backyard apartment is that it is a permanent improve…

This sounds pretty cool - and would help a lot with buying a place (using the rented backyard ADU to offset the cost of the mortgage). I suspect the bank wouldn't care about this for mortgage qualifications, but it would be nice if they did.

Definitely a good use case! We make the borrower a bit more stable and creditworthy with a unit like this so that might be something for us to dig into in the long run

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#92

Post by ilaksh »

sburl wrote: post #76

Hi everyone, my name is Spencer and I’m one of the co-founders of Rent the Backyard. Rent the Backyard was founded to help homeowners who want to earn extra income from their underused backyards but don’t want to spend a ton of time or money to make it happen. Rent the Backyard provides a turnkey solution — we handle all the logistics of putting a studio apartment in your backyard — helping you earn $10-$20k per year…

Have you considered expanding into southern California?

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#93

Post by sburl »

gwbas1c wrote: post #81
Mizza wrote: post #18

I love anything that creates more housing in the bay, but these are 30-year contracts! I can't even imagine getting into a 30 year contract with a company that might not exist in 30 months. What happens when the start-up goes under, or gets acquired, etc? Is the loan made directly to a third party bank?

Sounds like a mortgage to me

The part where you gain equity in the unit is a bit like a mortgage in that respect. This mortgage pays you though :) Also worth noting that you'll gain equity in the unit even if Rent the Backyard fails to find a tenant so you don't need to worry about the goalposts shifting.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#94

Post by ilaksh »

AnimalMuppet wrote: post #46

I see a few issues. First, the local zoning commission may not allow such units. Second, my dog uses the backyard on my dog's schedule, not the renter's. And the renter may dislike walking through a minefield to come and go. Third, where's the renter going to park?

Using the entire yard just as a place for your dog to shit is poor utilization of space. And this type of poor utilization is a big reason there is a housing problem.

The solution to the tenant not needing to dodge dog turds is for you to clean up after your -_&#ing dog.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#95

Post by uasm »

sburl wrote: post #76

Hi everyone, my name is Spencer and I’m one of the co-founders of Rent the Backyard. Rent the Backyard was founded to help homeowners who want to earn extra income from their underused backyards but don’t want to spend a ton of time or money to make it happen. Rent the Backyard provides a turnkey solution — we handle all the logistics of putting a studio apartment in your backyard — helping you earn $10-$20k per year…

> "Rent the Backyard was founded to help homeowners who want to earn extra income from their underused backyards"

Finally! Another avenue for greedy property owners to extort more money out of millennials. By housing them in an old garage* (repainted + some IKEA furniture to go on top). Can already smell that sweet ROI. VC hard-on right there! Gotta invest!

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#96

Post by emerongi »

AnimalMuppet wrote: post #79
sburl wrote: post #60

Earlier quoted context omitted.

Hi there - my name is Spencer and I'm one of the co-founders of Rent the Backyard. You're totally right about possible zoning restrictions in most places. The climate in California has really changed in the last two years to allow what the state calls "accessory dwelling units" or ADU ( https://www.sfchronicle.com/bayarea/article/Are-accessory-dw... ). These laws cover everything from parking, to setbacks, to privacy…

Well, I think that the issue will be whether the dog works for the tenant . Hypothetical situation: I don't have a dog. I build one of these. A tenant signs a lease. Then I get a dog. But the tenant is terrified of dogs. But they've signed a lease, and (because nobody thought it would be an issue) there's nothing in the lease about whether the owner can have a dog. Now the tenant is really stuck - essentially they ar…

In my country (not US) it is by law allowed for either side of the lease to terminate it under extraordinary circumstances.

This situation would certainly fall under that. Obviously, if the other party objects to the termination, you'd need to get some sort of medical verification for your condition.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#97

Post by tbyehl »

quickthrower2 wrote: post #84

I don't like the idea of taking a free and simple house, which you can sell, and myring it in a contract with another company (no less a startup!) so that when I want to sell, I need to explain the agreement I have with this other party to annex the land. I reckon it would devalue the house. I think people would be better off borrowing the money and building their own. Where I live (not in US) you might spend say $10…

Worse than that, the article states that you have to buy them out as part of a sale.

My house has an ADU and came with paying tenants. Zillow thinks my place is worth about $30K more than the average on my street... but I also have a pool (couple others do) and am the only one with a legit 5th bedroom, so I'm thinking the market value of that ADU is roughly nothing.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#98

Post by sburl »

Causality1 wrote: post #89
bbakerma wrote: post #67

Earlier quoted context omitted.

Hi there -- this is Brian from Rent the Backyard. What we are doing here is finding a synergy between homeowners and renters, allowing for people to profit off their unused backyards while increasing the housing stock. Airbnb started the trend of being able to monetize your home in the form of rental income and we see ourselves as an extension of that phenomenon. In our case, homeowners give up zero privacy to make m…

Oh I don't mean to say it doesn't make sense, both in terms of personal finance and with regards to the housing market. Then again, so does letting people sell their own kidneys and livers for transplant. >Rent the Backyard will give the homeowner an increasing share of equity in the apartment, until they own it completely after 30 years What's the life expectancy of these backyard studio apartments? Somewhere around…

We build units that are just as nice as your existing home. With proper upkeep, they'll last just as long too.

This was something the article didn't quite get right. You're able to pass this agreement on to a next of kin or new buyer. We'll even lower the priority of our lien to allow a mortgage to be issued.

You're right that one of our hopes is to enable people to stay in their homes amidst the rising cost of living. The income from this unit can be used to hire a caretaker or even enable the homeowner to downsize in place -- moving into the ADU and renting out the main home. In this scenario, the homeowner would just need to pay us half the market rent.

Finding a balance between renter and homeowner is a big concern of ours. The scale of the difficulty depends a lot of times on how much space there is on the lot. Most of the time we'll build as far from the main home as possible to help preserve privacy and independence but there's still a balance to find. We have an expectation for homeowners and renters alike to be reasonable and we don't want to need to enforce that with a contract but setting clear expectations and methods of recourse are important.

I don't think I've ever seen Brian wear a tie ;)

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#99

Post by sburl »

l4yao wrote: post #78
bbakerma wrote: post #70

Earlier quoted context omitted.

Hi there -- this is Brian from Rent the Backyard. We don't see bankruptcy as quite inevitable as you do :) In all seriousness, as written somewhere else on this thread: "We will need to eventually give custodial ownership to a larger entity (think big bank) in the medium term to mitigate the risk of our company going under for the homeowner, such that, if the worst-case scenario happened to our company, the homeowner…

Sorry, I'm unclear what this means. Will the bank be taking over the relationship in place of Rent the Backyard? Will they buy the stake in return for 50% of rental income?

The idea is that there's a third party who formally holds the contract so there's minimal disruption for the homeowner if something happens to our company.

Re: Rent the Backyard (YC S19) wants to build a studio apartment in your yard

#100

Post by Empact »

gxespino wrote: post #90
quickthrower2 wrote: post #84

I don't like the idea of taking a free and simple house, which you can sell, and myring it in a contract with another company (no less a startup!) so that when I want to sell, I need to explain the agreement I have with this other party to annex the land. I reckon it would devalue the house. I think people would be better off borrowing the money and building their own. Where I live (not in US) you might spend say $10…

Who has time to manage a construction project? Just show me where to sign and send me my monthly checks.

Definitely appreciate that many will benefit from farming it out, so I think this company substantially expands the addressable market, but in support of DIY (as someone who was raised in the house my father built), building your own such modest project is very achievable, particularly if you farm out electrical and plumbing concerns. With respect to managing contractors, my understanding is that roughly daily supervision will do, which can be manageable even with full-time employment. You may have better ways of spending your time, but let's not use that as a basis for overly-narrowing our own concerns and capabilities.
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