A home is a great investment because most properties tend to appreciate in value—if you hold it long enough, you can sell your home for more than what you originally paid for it. But what if you want to make money, but you don’t want to sell your home?
It’s easier than you think to turn your home into cash (while also holding on to the pink slip). Here are 5 ways to leverage your home to make money.
1. Rent Out a Room to Tenants
Do you have an extra room in your home that you’re not using? Rent out your spare room to a tenant and earn rent money every month. This is one of the easiest ways to develop a passive income, and you can put the money toward anything: paying off the mortgage, boosting your savings account, making investments, etc.
Not thrilled about the idea of having a roommate? Remember that you don’t have to a roommate for an indefinite amount of time. Come up with a goal and offer a lease accordingly. For example, if you’re trying to get extra money to pay off a loan balance of $10,000, then you might offer a one-year lease at about $833 per month.
You become the de-facto landlord when you have a tenant living on your property, so be sure that you reply promptly to all of your tenant’s maintenance requests. But you can also evict the tenant for violating the terms of the lease (it’s important to make your lease agreement very detailed on what is and isn’t acceptable). It’s your home, so make sure that your tenant respects it.
2. Use Your Home for Vacation Rentals
There could be plenty of people travelling through your area who want a cozy place to stay that’s more affordable than a hotel or bed and breakfast. Turn your home into the perfect getaway and use it for vacation rentals.
Vacation rentals have exploded in popularity thanks to vacation rental websites that make it easy to vet travelers. Many of these websites give you the option of renting out single beds or rooms, or the entire home. And the best part is that websites usually handle payments, so you don’t have to worry about a renter promising compensation and never following through.
3. Rent Out Your Home for Events
Do you have a picturesque home, or does your home have scenic views? Earn a big wad of cash (so to speak) by renting it out for events. Your home can serve as a venue for many different kinds of events:
- Family Reunions
- Corporate Events
- Private parties
If you have an especially beautiful home or property, you might even be able to rent it out for photo shoots or film productions. These events pay handsomely, and the staff will probably treat your home more respectfully than party guests. You’d also get to see your home professionally photographed!
Draw up an agreement with any company or person to which you’re renting out your home. The agreement should stipulate that the other party must pay for any damages that they cause to the home, and that you’re not liable for any injuries that occur on the property during the event. The other party may request their own stipulations, for instance, that there’s a clean pool or well-manicured lawn on the day of the event.
4. Take Out a Reverse Mortgage
Are you seeking more money for retirement? You might consider taking out a reverse mortgage. A reverse mortgage takes money out of your home and puts it in your pocket. You’ll lose some equity in your home, but you’ll gain a monthly paycheck that can help you enjoy your retirement. Reverse mortgages aren’t exclusively for houses, either. You can also take out a reverse mortgage on condo homes.
5. Run Your Business from Home
One of the best ways to become financially independent is to start your own business. Most new business owners run their company from home so they don’t have to pay for an office. This is a great way to save money, but it can also provide you with big tax savings.
When you file your taxes, you’re able to deduct certain business expenses like:
- Office Equipment
- Vehicle Expenses
- Startup Expenses (market research, advertising, etc.)
Most importantly, you can deduct your home office! Combined, these deductions can save you a significant amount of money during tax season.
Your home is a significant piece of wealth, so put it to work for you and make your wallet thicker.