Many people purchase a home simply to have a place to live and call their own. Few homeowners consider that a property is an investment that can add to your personal wealth or become a financial liability.
Most of the time homes improve a person’s finances by way of equity. The more you pay down the mortgage and the more the property appreciates the more equity you build. This equity can be converted into cash, but it isn’t the only way you can use your home to generate extra income. Today, there are more ways than ever to monetize the property you own.
One life event that gets people paying attention to the value of their home is retirement. Living on a fixed income that’s lower than before can make it hard for some people to retire by age 65, especially if they haven’t been saving for retirement.
The solution for many seniors is to tap into the equity of their home. But a home equity loan isn’t always the best option. Homeowners that are over 62 and wish to continue living in their home can use a reverse mortgage instead. This gives you options for how you utilize your equity, and they don’t have to be repaid until you decide to sell your home.
Reverse mortgages have a number of requirements and regulations, just like any other type of home loan. You can get a reverse mortgage explained online by a reputable lender to decide if it’s an option worth pursuing.
If you are looking for a way to borrow against the value of your home then you may be asking yourself “What’s a reverse-mortgage?” If you plan to stay where you are for a long time then it can be a good option because a reverse mortgage only comes due when the borrower is no longer living at all or no longer living on the premises. Therefore you or your family won’t have to worry about paying the loan back right away. Even if you pass away or choose to move to another place, the home can be sold, with the balance of the loan coming out of the proceeds. If there is still a balance owed after that, your family will not be required to ever pay back that balance.
Renting Out Rooms, the Backyard or the Entire Home
If your retirement income doesn’t cover all of your expenses or you are trying to save money before retiring, renting out a portion of your home is a viable solution. You can even offer your yard as a site for campers. Sites like AirBnb.com and Home Away are making it possible for any homeowner to earn extra income from their property.
You can list your home and specify the rental conditions such as length of stay, cleaning fees, whether pets are allowed, etc. Renters are able to view your listing and schedule the rental through the website. This makes it easier for homeowners to find renters, receive payments and get additional support from the business running the website. For example, AirBNB has a Host Insurance Protection program that offers up to $1 million in coverage.
Renting Out Parking Spaces
If you have extra space in your garage, driveway or yard you can rent that out as well. This is particularly lucrative for people that live near a downtown area, offices or a sports stadium. You can charge people by the month, week, day or hour to park in your yard. The site JustPark.com makes it easy to list your available spaces and find people that need a place to park.
However, if you live in an HOA you may be limited in how you monetize the outdoor space. Some HOAs have restrictions on how many vehicles can be parked at a property and may also restrict homeowners from offering their yard as a temporary parking lot.
Renting Out Storage Space
If you have a garage, attic, basement or storage shed on your property these spaces can be rented out as well. You may need to invest in security measures up front, but offering storage is a great way to turn unused space into a steady stream of income. In addition to monthly rates and security, you’ll also need to outline when and how the renter can access the storage space.
Offer Your Home as a Set or Event Space
Do you have a beautiful view? Is your home a historical property with interesting architecture? Filmmakers and event planners are always looking for unique spaces that can be used as a set or for events like weddings. Offering your property to local professionals can be a very lucrative way to make money in just a day or two. But do keep in mind that during the filming or event you’ll need to have another place to stay.
Host a Foreign Exchange Student
If you live near a school or university with a foreign exchange student program you can make up to $200 a month by becoming a host. If you offer to cover meals, laundry, Internet access and/or transportation you can make even more by hosting a foreign exchange student or a professor.
Students typically stay between six weeks and six months so it’s not a long-term commitment. To learn more about becoming a host contact community colleges, universities and language schools in your area.
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