It’s a tough discussion across the board. I’m talking about owning real estate in this market when seeking a job in a new city. Whether we are conducting a search for an individual contributor or a CEO – the challenges and options are identical. Critical financial choices have to be made that were non-existent a few years ago. We all know that the higher the salary/position the longer it takes to replace your job and income. Some executives I have spoken to have been out of work for two years. OUCH! That has to hurt across the board.
What I am hearing (and suggesting) more and more for candidates where relocation is required is… becoming a landlord. It may be their only option if they are unable to sell their home (and most fall into this category) and to take the risk of turning down an offer (and waiting for another opportunity) because of the boat anchor of owning real estate may not be the best option on the table. Let’s face it – it may be years before the the US housing market experiences a real meaningful recovery. In the meantime, candidates need to get back to work now and get the cash flow engine moving again. If candidates wait too long before pulling the trigger, it may become a moot point. Not good. Becoming a landlord for a couple of years until the market turns may be a reality. It’s not the end of the world either.
Even in better markets, many of us experienced long delays in selling hard to move properties. I myself have been faced with this dilemma twice. In both cases I decided to do a lease-purchase as a way to sell both properties. I required the buyer to pay a large deposit which they would forfeit if they were unable to close on the property at the end of the 24 month lease purchase. It worked both times and was a win-win for the buyer and seller (that would be me). So this is a time to think outside-the-box to solve the challenges of having a great job offer in a new city and creating a work-around for the real estate you own. Candidates must balance the risks of becoming a landlord or remaining unemployed. For some of our candidates – they just can’t get there. They would prefer to go down with the ship. Others (more recently) are rolling the dice and learning what it takes to become a landlord (at least temporarily) until market conditions improve.
I have also found that my clients are willing to step up on relocation packages like never before to land the right talent – and they should. Giving candidates six months of living expenses seems to be acceptable on both sides of the table. This gives the candidate (a little) time to exercise all available options and to be available to start their new job immediately. And now is the time for clients and candidates to get creative and find ways around the real estate issues and close search assignments that require relocation. It’s very doable.
Commute? Some candidates prefer to commute Monday-Friday and become a part-timer with their family. I have seen that movie too – not good. I think commuting can be an option for a few months but not long term. Neither is becoming a landlord – but that should not last forever.
So tell your candidates to put up that For Rent sign and take that offer. Oh yeah – and make sure they get the security deposit + first and last months rent – up front!