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-   -   Employer Sponsored Mortgage?? (https://www.flyertalk.com/forum/milesbuzz/592548-employer-sponsored-mortgage.html)

onefreetraveler Aug 20, 06 12:04 am

Employer Sponsored Mortgage??
 
On Friday, I found out that my employer will be changing my territory. I used to travel to many different cities throughout the US. Based on this new position, I will be required to spend approx. 10 nights per month in Atlanta.

So, based on this change, I'll still earn the FF miles and I can always continue my hotel programs. However, I may consider actually buying a home in the Atlanta area. This would not be my primary residence, but merely a place to live during my business trips to ATL.

Now, my employer pays for all my travel expenses and at $200 per night, the monthly hotel expense will be a minimum of $2000.

I wonder if I could convince them to reimburse me for a portion of my mortgage at a discounted rate of $100 per night. To me, it's a win-win situation. My company saves $100 per night or $1000 per month and I receive $1000 per month towards my mortgage in Atlanta.

Has anyone ever proposed a similar idea to their employer?

Does anyone currently have an agreement like this with the company that they work for?

Thanks

John C Aug 20, 06 12:38 am

Though it is not especially common, companies have been known to negotiate housing allowances. It is more common for a full time assignment, especially when living offshore, but it does occur sometimes for part time travel as you've described. Unlike standard hotel expense, I believe these allowances are taxable as income if the residence is domestic so confirm the tax status prior to discussing any numbers. The real risk though is that unless provisions are made in an employment contract (which sounds unlikely in your case) you have the full risk of covering the second mortgage should your travel needs change or if you are separated from the company.

ContinentalFan Aug 20, 06 2:47 am

There are definitely taxable consequences to what you’re suggesting. I wonder could you make the following suggestion: have a target for expenses, customer related. For every dollar you save, you get a certain percentage. The mortgage idea is interesting, but since the company sees benefit to you, it behooves them to capture value for the company: try to offer you 50 cents on the dollar, something like that. It's what I would do. ;) Whatever option you choose, you are going to pay taxes.

747LWW Aug 21, 06 1:16 am

I spent 5 years in Rio on an assignment with a Fortune 50 organization. They paid for local accommodations, auto, driver, etc. My question is what is the policy of your company re temporary relocations. A variation of that policy might get you what you are seeking.

Please keep us advised regarding your outcome.

Good luck :)

747LWW

johnndor Aug 21, 06 12:16 pm

It can vary greatly company to company... some large companies can be very inflexible as to official policy and exceptions.

Your best bet may be to try and negotiate some sort of per diem, say $150/night (including food?) where both of you can make out in the long run.

Do be wary of home ownership costs such as closing costs, taxes, insurance and upkeep, and what happens if the employment (or assignment/contract) falls through?

dr84 Aug 21, 06 5:29 pm

Definetly try. And Im sure you can get more than 1000, go for 1500

pdhenry Aug 21, 06 6:08 pm


Originally Posted by johnndor
Your best bet may be to try and negotiate some sort of per diem, say $150/night (including food?) where both of you can make out in the long run.

The current US Government per diem rate for Atlanta (including food) is $164. This assumes a lower nightly lodging rate ($115) than you'll probably find without being eligible for a Government rate.

Just be reasonably sure that your frequency of travel will be sufficent to make this work out for you.

thegeneral Aug 21, 06 6:35 pm

You might want to talk to an accountant about this. Perhaps there is some way you can bill them per night you stay there at the going hotel rate. I would think that most companies would prefer to just get a corporate apartment for you. Personally, I would rather have someone to clean things up every day and have enough hotel points to have a nice free vacation once a year.

ftweb Aug 22, 06 10:33 am


Originally Posted by onefreetraveler
Now, my employer pays for all my travel expenses and at $200 per night, the monthly hotel expense will be a minimum of $2000.

I wonder if I could convince them to reimburse me for a portion of my mortgage at a discounted rate of $100 per night....

This sounds kind of risky, as you might be locking yourself into this job--particularly as the real estate market declines you might not be able to sell.

My employer offers a mortgage subsidy (basically they lend me the money at a much lower-than-market rate), but I have no intention of using the benefit until I'm absolutely sure I want to stay there for at least 5 years. (I'm also happily watching San Francisco real estate prices slowly decline...)

Why don't you ask if they would just rent an apartment for you? Same convenience, much less risk, and probably much less tax liability.

cur Aug 22, 06 11:09 am


Originally Posted by onefreetraveler
On Friday, I found out that my employer will be changing my territory. I used to travel to many different cities throughout the US. Based on this new position, I will be required to spend approx. 10 nights per month in Atlanta.

So, based on this change, I'll still earn the FF miles and I can always continue my hotel programs. However, I may consider actually buying a home in the Atlanta area. This would not be my primary residence, but merely a place to live during my business trips to ATL.

Now, my employer pays for all my travel expenses and at $200 per night, the monthly hotel expense will be a minimum of $2000.

I wonder if I could convince them to reimburse me for a portion of my mortgage at a discounted rate of $100 per night. To me, it's a win-win situation. My company saves $100 per night or $1000 per month and I receive $1000 per month towards my mortgage in Atlanta.

Has anyone ever proposed a similar idea to their employer?

Does anyone currently have an agreement like this with the company that they work for?

Thanks

Buuut whaaat abooout the pooooiiinnnnts?!?!?

redbeard911 Aug 22, 06 12:59 pm

10 nights a month is nothing; I wouldn't buy another house/condo for that. I would push for the company paid corporate apartment. The upside is that you can leave toiletries there. :rolleyes: ^

CrazyOne Aug 22, 06 1:31 pm


Originally Posted by cur
Buuut whaaat abooout the pooooiiinnnnts?!?!?

Yeah, no kidding. :D

I think the rental idea is better than buying. You should be able to get a decent apartment for the whole month for under the $2000 cost. In this scenario, it probably avoids taxable income because you're only there part of the time (not your main residence), but I am not an accountant. We used to rent apartments for employees, and it was a touchy thing as far as whether or not it was really allowed to be a simple expense for the company vs taxable income to the employee.

If you said you wanted to buy a house because you're eventually going to move to Atlanta, that's different. Perhaps then it would make more sense. But it won't save the company as much as you think. If you say $1000 allowance, that will be taxable to you, and taxable to them for various purposes (FICA, unemployment, etc). So you won't get $1000, and they won't get $1000 of savings. And if you got to where you had a net of $1000, they would get very little or no savings.

cur Aug 22, 06 11:00 pm


Originally Posted by CrazyOne
Yeah, no kidding. :D

I think the rental idea is better than buying. You should be able to get a decent apartment for the whole month for under the $2000 cost. In this scenario, it probably avoids taxable income because you're only there part of the time (not your main residence), but I am not an accountant. We used to rent apartments for employees, and it was a touchy thing as far as whether or not it was really allowed to be a simple expense for the company vs taxable income to the employee.

If you said you wanted to buy a house because you're eventually going to move to Atlanta, that's different. Perhaps then it would make more sense. But it won't save the company as much as you think. If you say $1000 allowance, that will be taxable to you, and taxable to them for various purposes (FICA, unemployment, etc). So you won't get $1000, and they won't get $1000 of savings. And if you got to where you had a net of $1000, they would get very little or no savings.

If the company is paying, get the hotel. Then you get enough points to pay for a vacation for the family. AND if you don't have as much of a workload in Atlanta, you don't have the condo burden.

ftweb Aug 23, 06 12:31 am


Originally Posted by cur
If the company is paying, get the hotel. Then you get enough points to pay for a vacation for the family. AND if you don't have as much of a workload in Atlanta, you don't have the condo burden.

Yeah, but with the condo you get to leave your toothpaste, deodorant, shaving cream, even clothes there, which means you can travel with barely any luggage and not check anything.

If you are really spending 1/3 of your time in Atlanta, I'd think having "your place" there would make life a lot easier.

Quokka Aug 23, 06 1:12 am

What does any of this have to do with Discussion of the latest 'frequent flyer program' buzz...only! ?


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