…We do own a home, but I honestly believe we will never have it paid off. Short of my husband getting another job, do you have any ideas on what we could do?


Thank you Candice for your question – with all the talk in the media about more employment positions than applicants, we still need to be reminded that today’s living expenses are increasing faster than employment incomes and many are feeling the squeeze in today’s economic market.

Candice, I want to share a story with you about a very good friend of mine that created a homestay business and used this income to make the payments on her mortgage to eventually today be mortgage free. A homestay business is similar to an Airbnb business but uniquely different in that it is mainly used for international student housing all around the world. The idea of having a boarder in your home is not new, in fact, it was a very common practice in the early 1900’s. I know, today most people would not want to take in a boarder, instantly giving up their personal space and privacy. That being said, this activity, now referred to as a homestay business, has become surprisingly popular within the academic world and it has helped many people bridge the gap with their income and the lifestyle they desire. The internet has opened a whole new world of business opportunities, with some big companies now offering services to connect students and travellers with hosting families that are all part of a new network of temporary scholastic lodging facilities.

Starting a homestay business is relatively easy, however there are few things you need to keep in mind. You can never really step away from this type of business, always monitoring your student boarders and interviewing potential new ones. This is a true home-based business and as such must be reported on your tax return. You will need to declare the rental income, but by doing so, you can also take advantage of the many household expenses you can write off annually.

Good, comprehensive home insurance is also a must, and once you get the hang of things you will also want to set out the “household do’s and don’ts” to your new homestay students.

My friend has had a homestay business for the last 30 years and used this extra income to upgrade her homes throughout the years. Besides the obvious desire for a larger residence and perhaps acquiring more boarders, my friend realized that this business was a great way to continue using the qualified home expenses as future tax write offs to lower her income. Mortgage interest, property taxes, home insurance, and all utility expenses are legitimate write-offs to lower income. The secret to really benefiting from this strategy, would be to live within your means and use all of the business income to pay down debt. This became a very manageable business venture for my friend, one that lowered her marginal tax rate through the years and ultimately allowed her to pay less taxes and increase her net worth.

If you are thinking of having a boarder in your home, please discuss this with your accountant, and never think that you cannot declare this income on your tax return. All it takes is an anonymous tip to the CRA from a disgruntled neighbour or tenant, and you will be audited. Run your homestay business the right way. Do your homework and make a business plan. Consider your home location and whether you want to provide rooms for travellers, international students, or just people from your community.

Will you cater to singles, business professionals, or have an age or income requirement?

Whatever you choose, if you decide to entertain the homestay business and use what my friend would call them as her
“mortgage helpers,” you could stand to make a lot of money and will most likely reach your goals in half the time.


Good Luck & Best Wishes,

ATML - Christine Ibbotson