If you own your home or even rent an apartment with an extra bedroom, you can make money from your spare room and get your house to pay for itself.
Your monthly mortgage or rental amount is likely the largest recurring expense you have so if you can reduce it or get someone else to pay it, you will come out ahead financially.
There are a number of ways you can make money from your spare room or even your entire house and, depending on where you live, you could create a whole new stream of income without lifting a finger.
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How To Make Money From Your Spare Room
One of the best ways to make money from your spare room is to use it to start a business.
Get A Long-Term Roommate
Take in a roommate or renter.
If you have a larger house or condo that has at least one extra bedroom, you could rent out one of the bedrooms to a student or single working person.
Even if you charged them $75-$100 a week for the bedroom, including a shelf in the refrigerator and kitchen privileges, you’d end up with roughly $300-$400 extra a month. You can apply those dollars toward your house payment.
You’d shave costs off of your monthly mortgage.
Open up a hotel
I’m joking, of course, but you might be surprised to find out that many people are renting out spare rooms in their houses on a short-term basis for a lot of money.
Sites like Airbnb are really popular with people looking for short-term accommodation at a cheaper price than a traditional hotel. Some people look for lodging in Airbnbs because they do not have the credit history required to get a regular long-term rental.
Oddly enough, you don’t even need to live in a touristy area or city to make a lot of money.
If you live near a university or college or even a transportation hub, you could make a lot of money by starting your own Airbnb.
A word of warning – make sure your city allows these kind of rentals and make sure to be considerate of your neighbours. Parking can become an issue as can noise complaints although if you are living in the property, you will be able to police any situations.
Make Your Home A Vacation Property
If you are prepared to leave your home for a week or do, consider making it a vacation rental.
Another way to earn with your home is to rent out your house to others for short stints, like vacations, holidays, and special events.
It’s possible for you to get enough cash on a regular basis to pay your mortgage at least some of the time whenever you rent out your home a few times a year.
If you live in a tourist town, renting your home out during the high tourist season for three or four weeks a year could provide you with a nice tidy bundle to apply toward your home loan.
If you live in a popular area for weekends away or near a stadium that hosts big sporting events, you are probably sitting on a goldmine.
You could stay with friends and family for just a few short weeks a year while renting out your home for as much as $1,500-$2,000 a week to those who wish to see the sporting events or enjoy the colorful foliage in the fall.
If your home is large, you will be able to make even more money. Just this weekend, 10 of my friends and I rented a large house for a weekend for $1500!
ion, rent out your home to someone who wants to vacation in your town and then use the cash to cover your vacation costs.
Websites like Vacation Rentals by Owners (VRBO) or AirBnB make it easy for you to list your home for the exact period of time you wish to make it available for rental.
Renovate your home to create a rentable space
If you have a finished basement (especially if it has a separate exterior entrance), you could really make some money by renting it out to a long-term lodger.
I live in the burbs about an hour from the nearest city and my next door neighbour rents out his basement for $1300 a month. This more than pays for his mortgage plus extras.
If you live in a two-story home or a home with a basement that is unfinished or you have space to build an in-law suite over the garage, you may have a virtual gold mine.
Do some renovations to include a small living area, kitchenette, bathroom, and bedroom. A separate entrance is always a huge plus.
If you have a large upstairs area, it may be easier than you think to hook two or three of the rooms together and have a kitchen installed.
Voila! You now have a small apartment that you could rent out for several hundred dollars a month.The same goes for a finished basement. You could make a studio apartment with open living, dining, and kitchen area with a bedroom area installed behind one wall.
Even though both of these plans would involve you doing a lot of the work (tearing out walls, painting, and the like) and then paying upfront for the renovations you’re unable to do yourself (wiring, plumbing, and cabinet installation), you stand to make hundreds monthly once you rent out the space.
Purchase A Multi-unit Property
Another way to let your home pay for itself is to buy a multi-unit property like a duplex or triplex.
You could live in in one unit and rent out the other(s). Then, use the rent from the other units’ tenants to pay your entire mortgage payment on the property each month.
Owning and living in a multi-unit property allows you to live “rent-free” while you build up equity in the property.
You’ll also learn how to become a landlord while banking some extra bucks.
In fact, you may even have extra money left over from the tenants’ rent payments after paying your monthly mortgage payments. Then, you can use that income to invest in more real estate, which then pays for itself with its own renters, too.
Or you might want to use the extra income to get in to “flipping homes”—buying bank-owned or short sale properties to fix up and sell or rent out to keep more extra money coming in.
However you decide to use it, the multi-unit property purchase plan is great for getting you the cash for investing in your first real estate deal, regardless of what you do with it after you buy it.
Plus, you’ll have the opportunity to “stick your toe” into the waters of becoming a landlord and managing a real estate investment.
Ultimately, your home will be paying for itself when you buy and live in a multi-unit property.It’s exciting to think about how your home could be the key to your future financial freedom.
Take some time to explore all the ways you might be able to let your home pay for itself. When the money starts coming in, you’ll be glad you did.
Things to consider before you money from your spare room or house
Before you start making offers on duplexes or clearing out the junk from the spare room, make sure to do your research and plan for every eventuality.
Invest in an attorney
Another factor to consider is meeting with a real estate attorney to help you draw up a contractual agreement form to use with renters (even short termers) to ensure you understand one another.
Spelling out the specific aspects of your arrangements in advance can help prevent troublesome situations later.
Who do you want to rent to?
You may have trouble imagining yourself taking in a stranger to rent one of your bedrooms but can you find a trusted college student or young professional who’s just starting out.
If you have children at home, you may want to consider asking for background checks and references before you take anyone in. Once you open up your home, you want to make sure your family is safe.
If you do end up trying it out (renting out a room), you may be pleasantly surprised to see how simple it is to adjust to sharing your home with another person.
Check your local bylaws
Are you allowed to rent out rooms or even entire floors of your house in your city?
This is especially important if you are planning to do extensive renovations such as adding a separate entrance to your property.
Contact your insurance company
It’s important to carry the necessary liability insurance and include the extra income in your taxes if you decide to undertake some of these suggestions.
Check with your city’s coding and zoning officials or an attorney with your questions.
It may be hard to imagine that your home could actually be paying for itself.
With some work on your part, you can make hundreds of extra dollars monthly. Using your home to gain more income can get you out of a financial jam.
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