Unless you are a billionaire property development cum politician, your home is probably the most expensive asset that you own. Think about it, cars have a lifespan of just a few years, and how many people do you know who are collecting rare works of art? However, there is one, often understated downside to home ownership. It is that homes tend to blackholes for money. Sure, you can take out a home equity loan, but by-and-large it is an illiquid asset. It doesn’t need to be like and here are five ways you can profit from your home.
1) Rent a Room
While the concept behind Airbnb and other sites has been around for hundreds of years, it has been forgotten over time. That being said, renting out a spare bedroom or an in-law apartment is a great way to turn your home into a money-making machine.
It’s a pretty simple process and in some cases, the extra income can be tax-free. In fact, more and more homeowners have been adopting this tactic in recent years. The reason is simple. Why should they work themselves to death just to cover their mortgage, when they can turn the unused space into their home into cash? It’s pure genius and it is a tactic you should consider – either via short-term or long-term rentals.
2) Turn Your Driveway into Cash
Granted this only really works if you live in a big city where there is limited parking space. But if you are in a city where parking is horrendous – such as San Francisco – renting out your driveway is a money-making tip you will want to consider.
However, potential issues include city ordinances and insurance. As such, you want to make sure you are good to go before renting out your driveway.
3) Reverse Your Mortgage
If you are 62 year of age or older, you must stop and ask why you are continuing to pay your mortgage? This does not mean that you should default on your loan, but there is a better way – a reverse mortgage.
This mortgage product has been around since the 1960’s and it allows seniors to tap into the equity they have built up in their homes. While this might sound like a home equity loan it is not. With a reverse mortgage, you can effectively freeze your mortgage payments and then use the cash available to invest in other ventures such as buying a rental property.
Now this option might not be viable for everybody. In fact, you will want to talk to your financial advisor and learn about the new financial assessment requirements before applying for a reverse mortgage. But if you fit the bill, then this could be a great way to profit from your home.
4) You (r Home) Belongs in Pictures
Have you ever thought about renting out your home as a location for a movie or television show? Well, this is another excellent way to make money from your home and it does not matter if your home is unique or downright ordinary. Filmmakers are constantly looking for new locations and renting out your home could be an easy way to cash in.
While it is not so easy to grab the attention of location scouts. All it takes is a relationship with one and then next thing you know your home will be in the movies. If you are not sure where to get started, then just do a simple online search as there are several websites which list available properties.
5) Open a Home-Based Business
While the other options have mainly been passive, opening a home-based business is a more active approach.
The possibilities are endless. If you love to cook, then you could set up a boutique restaurant or you could offer your services as a pastry chef. Maybe you could take your knowledge or experience in business and set up or a consulting practice or become a day-trader. If you love children, then how about a day care center or some sort of educational business. Heck, you could even turn your backyard into an obstacle course.
No matter what you decide, there are numerous ways to transform your home from a money pit into a money-making machine. All it takes is a little creativity.