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Feb 2017

5 Unique Ways to Use Your House for Extra Income

Paying your bills may not be your favorite thing you do each month, but fortunately, there are some clever ways to earn extra cash to put toward these recurring expenses. Whether you’re hoping to put more money toward your mortgage principal or even help fund an extra vacation, nothing is out of reach if you’re willing to give one of these ideas a try!

Vacation rental sites

Chances are, you’ve heard of Airbnb, Homeaway, and VRBO and may have even used one of the sites before to book a vacation home. But have you ever considered renting out your own home while you’re on vacation? Instead of letting your home sit vacant while you’re away, you could have someone stay in your home while you collect some cash. This means you can bypass the house sitter (and their payment!), and you’ll have extra dollars to put toward your monthly payments.

Considerations to Make

Before listing your home on a vacation rental site, though, you should know that there might be some costs involved, such as:

  • Service fees, which can be a flat fee or a percent of your profit

  • Providing supplies like paper products, towels, etc.

  • Insurance (check to see what your homeowners policy covers – you may need additional coverage)

  • Cleaning, whether purchasing supplies to do it yourself or hiring a cleaning service

  • Taxes, depending on how many days out of the year you rent your home

Be sure you’re comfortable with inviting strangers into your home while you’re away. While this is a great way to earn extra money, it’s certainly not a decision to be taken lightly – be sure to weigh the pros and cons.

Income property

Perhaps you have an extra room in your home or basement, or even a detached living space – these could be rented out on a long-term basis to provide a steady flow of cash to put toward your mortgage principal. After all, if you have extra space going unused, why not use it to generate additional income? It’s important to do your research before you decide to become a landlord, though, as there are some things you’ll need to carefully consider.

  • Understand the law. Renting out your home isn’t as simple as finding someone to pay you in exchange for a place to stay. In fact, renting a room in an occupied home may not even be legal where you live. It’s always a good idea to carefully review the laws and regulations in your area before deciding to make your home an income property.

  • Don’t forget the background check. Unless you’re renting a room to someone you already know very well, don’t skip this step! Not only is this a good way to keep yourself safe, but it can protect you from renting to someone who has a history of failing to pay rent or other financial concerns.

  • Set guidelines. Even if you rent out a room, it’s still your home – and you make the rules for what happens under your roof. Be sure you make it clear up-front your policies on things like, pets, smoking, quiet hours, parking, visitors, etc. Also, document these rules in a rental agreement for you and your renter to sign. While you hope to avoid conflict altogether, if it happens, you want to be sure you protect yourself.

  • Ask for a deposit. Requesting a month’s rent up-front is a way to ensure you have a financial “cushion” in the event your renter decides to move out suddenly.

When it comes to your mortgage, keep in mind that your additional earnings can’t be used for qualifying, or happen before, during, or soon after closing, if you purchase your home with the intent to occupy. Always check with your mortgage banker to see what is and isn’t allowed.

Rent your driveway

Live near a sports venue or down the street from a beach access? You can use your proximity to crowded places to your advantage. Consider renting out parking spaces in your driveway or yard to an avid sports fan headed to the big game or a surfer heading to catch a wave. Feeling ambitious? You could even sell ice cold drinks while you’re at it! If you live in an urban area, parking usually comes at a premium. If you’re fortunate enough to have your own spot to park a vehicle but you aren’t using it, consider renting it out. This is a great way to generate extra income that doesn’t require investing your time or money.

Put your creative skills to the test

Are you the creative type? You may not even have to rent out your personal space to make some extra money! Here are a few clever ideas for bringing in extra bacon:

  • Host classes in your home – Maybe you enjoy cooking or art; put your skills to the test by offering classes for a fee

  • Become a social media brand ambassador – If home décor or design is your thing, build an Instagram following by showcasing your beautiful home through imagery and seek out brand ambassador/influencer opportunities for a chance to earn extra cash

  • Sell home furnishings – Whether you have things sitting around that you aren’t using, or you have a knack for refurbishing furniture, this is an easy way to earn a buck

Work from home

This may sound easier than it actually is, but if you’re able to find a job working from home, or if you manage your own business from home, you may have the ability to deduct some of your work expenses and some mortgage interest from your tax return. The money you save can be used to put toward future expenses. You can learn more about the home office deduction on the IRS website. There are a number of ways you can use your home for extra income – the ideas above are just a few options to consider. If you plan to rent out any part of your property, you’ll want to check in with your lender beforehand to be sure you’re able to do so.