One of the largest investments we will make in our lives will be our homes. Housing accounts for 37 percent of Americans’ budgets. We save for years sometimes in a bid to gather the all-important deposit, put a lot of effort into choosing just the right home and spend a good part of our lives working towards full ownership. Throughout this time, we contend with costs such as mortgages, property taxes, and repairs but did you know that your home can also make you money? Many people make the mistake of not realizing the many ways our homes can be a source of income besides the capital appreciation we all hope for in the event that we sell our homes. Check out these ideas and see if one of them could be right for you.
Explore Spare Spaces
People are always looking for spaces to rent where it is office space or for storage. In fact, 1 in 11 Americans have storage spaces for their excess property and as of 2017, the self-storage industry had grown 7.7 percent since 2012. The average amount paid is approximately $91 per month according to SpareFoot so over a year you could be earning an income of almost $1,100. Spare rooms and garages are great for storage and there are multiple online platforms that can help you list your space for interested parties to see. This is one of the easiest options since it requires not much effort on your part except maybe clearing out a few boxes.
In cities where parking is often an issue, rental of driveways are now becoming common. Americans spend around 17 hours each year simply looking for parking. So if you have space on your driveway or a spare allocated parking space, you could earn up thousands of dollars in income each year. In cities such as Miami, Denver, and Atlanta, parking spaces can carry a charge of $5-$25 per day so your income could be up to $200 each month.
Over the years, you would have built up equity on your home. For the older homeowners, equity release could be the ideal option to earn income from their home. In this option, you still retain the use of your home but also gain access to the value of your home you would have built up over the years, in the form of a loan. This financial arrangement normally covers the period until the owner is deceased or choose to move out of the home. In addition, if your financial circumstances change, you are free to repay the amount paid out. For those about to or already retired, it allows them to borrow against the value of their home to fund their retirement plans, home renovations or rising medical bills. Fidelity Investments estimates that retirees saw a 6 percent rise in healthcare costs in 2018. Typically, around 20-50 percent of equity is released but the percentage normally varies according to your age and circumstances.
This is a more intensive approach but the returns can be equally high. If you have a spare room, consider listing it on short stay websites such as Air BnB and VRBO. Priceonomics estimates that sharing hosts earn up to $924 per month from the use of these platforms. If you don’t have spare bedrooms, don’t worry. With a little work, an office or even your garage can be converted into a rental space and won’t interfere with your home layout or family life. If you live in a historical town or city with tourist attractions, why not take advantage of these and create an experience? Although it requires a larger capital and time investment, a self-catering apartment can command hundreds of dollars each rental period so it does have a much better (and quicker) return rate.
There are many ways your home can be a source of income for you and your family. Whether it is welcoming a guest into your home, or making use of spare spaces; there’s sure to be a perfect fit for you. Armed with a little planning and imagination, you can find yourself earning money from your home today.