Real estate is a big investment, but remember it is an investment. If you purchase a property strategically, it can help you generate income, tax savings and capital appreciation.
If you have a lot of extra space in that spare bedroom, garage or basement that you are already heating, paying taxes on and making mortgage payments on, how about earning some extra money to help you pay those bills? There is a positive side for becoming self-sufficient through making money with the assets you already have. With increased day-to-day costs, there is a huge financial advantage in keeping your overhead costs low by having a home-based source of income.
It’s always a good idea to check first with your local bylaws and ensure to check about licenses, fees and other requirements. Also, don’t forget to report your earnings on your income tax return.
The following nine tips are some great ways to make money off your home:
- Rent out a portion of your home: When buying, look for properties with basement suites or mother-in-law suites. If you are willing to share living space, extra bathrooms, you could even use the spare bedroom for a home stay or get a roommate. This can create substantial monthly revenue that can reduce or cover your mortgage payments.
- Rent out storage or parking: If your garage or basement is usually empty, rent them out for storage space. Similarly, if your condo comes with a parking space you never use, rent it out. Be sure to check with condo regulations first, and have a contract so you are not liable for damage.
- Rent to vacationers: If you travel for months at a time, offer your home as a vacation rental. This also works if you have a second, often-unoccupied property in a desirable location. Make sure you have a contract that covers any potential risks.
- Use your home for a business: Not only does this save you the cost of renting a separate location for your business, it creates tax deductions for the portion of your home that you use for work. Even if you don’t have your own business, you may be able to telecommute with your current employer.
- Throw party sales: Some homes are just natural gathering places. You can host a party sale such as Tupperware, Mary Kay or anything that interests you (such as lingerie, essential oils, bath and body products, health and weight management products, etc). If you are not interested in being a salesperson, independent distributors may be willing to part with a share of their profits or pay to use your home instead of theirs.
- Boarding place for dogs and cats: Are you an animal lover? Many pet owners would rather board their pets in a private home rather than a commercial kennel. Make sure you follow all bylaws and necessary requirements.
- Ready for Hollywood? Your home might have star potential. There are residential property scouts that search for properties for films, TV shows and commercials. You can also register your property in a film location. Scouts will prepare a digital casting call from properties and match the director’s needs. Make sure that you are fully aware of what changes or modifications they will do to your property and to ensure they will complete all repairs necessary due to set designer’s damage.
- Reduce taxes: When you purchase a revenue property, you generate substantial tax deductions for mortgage interest, closing costs, property taxes and ongoing maintenance.
- Leverage your equity: If you have substantial equity in your home, you have access to an affordable source of funding for other revenue-generating opportunities, like investments, starting your own business or upgrading your education.
Some of these options might seem intimidating, but you’ll find it much easier if you speak with a professional on how to create wealth through real estate. Any good mortgage expert will be able to help you explore your options and determine the best plan of action.