Two entrepreneurs have created a start-up that will help homeowners make some extra cash—by renting out their backyard. The founders of Rent the Backyard hope to ease the Bay Area’s housing shortage by building “granny” units.
While a homeowner could, theoretically, build a unit and rent it out themselves, Rent the Backyard aims to take on the work and responsibility of getting permits, finding builders, locating tenants and collecting rent—in exchange for 50% of rental income for 30 years.
Co-founders Spencer Burleigh and Brian Bakerman have just begun to survey properties as potential building sites. While doing survey work they check to see the size of a backyard, and they mark the area with cones, so a homeowner can visualize the rental unit’s footprint.
“We’re getting close to 20 so we’re pretty good now, our calendar is quickly booking up,” said Burleigh.
If a homeowner uses Rent the Backyard’s service, they don’t need to put any money down. “Absolutely no money down for the homeowner, we just ask that they enter into a partnership with us and agree to split the rental income for the long term,” Bakerman said.
The entrepreneurs, who both went to Carnegie Mellon University, are working with companies like Plus Hus that build pre-fabricated studio units. According to the Committee to House the Bay Area, or CASA, about 300,000 of these small units can be built without affecting traffic or density.
“We’re backed by really great investors who are willing to put the money in now and wait for it to pay back in the future,” Burleigh said. “The idea being that the rent is really high in the Bay Area so even with only 50% of the rental value we’ll be able to make back our money pretty quickly.”
Rent the Backyard is focusing on the South Bay and the Peninsula but is willing to build anywhere.