Many will agree that one of the easiest and most effective ways to establish generational wealth is by utilizing the money-making power of real estate. While not all homeowners can purchase a second income-generating property, many can utilize their current home to move forward financially through rental income. Here are two ways you can generate income from your house.
Renting Out a Room or Your Whole Basement
If you live in a house and have an extra room or a finished basement, renting out a room or portion of your home is a great way to bring in some extra cash and start you on your journey to becoming a landlord.
Renting out a room has many benefits:
- You can earn money from your unused space. If you have extra rooms or even just one spare bedroom, renting it out may benefit everyone involved. The amount of money you can earn depends on the location and size of your house, but renting out rooms is generally profitable since it requires little work and maintenance compared to other ways of making income from real estate.
- You’ll meet new people who will likely become friends (or at least friendly acquaintances)
- You can use the rental income to cover a portion of your mortgage.
How do you start renting out a room or portion of your home? Here are some steps you should take:
- Remove all your personal items from the space
- Thoroughly clean the space
- Ask family and friends if they know of anyone looking to rent a space like yours
- If you can’t find a family or friend to rent your space, try listing your rental on sites like Craigslist, Facebook Marketplace, or Zillow
A Tiny House Rental in Your Backyard
While it’s not quite as popular as renting out a spare room or offering your entire place up on Airbnb, you can earn cash by renting out a tiny house on your property.
Tiny houses are becoming increasingly popular as an alternative to mainstream housing. The tiny house movement aims to reduce materialism and embrace minimalism to live more simply, but it also provides an opportunity for those who want to earn some extra income.
Renting out a tiny house is different from renting out one of your bedrooms or even an entire home; there are unique challenges involved with this type of rental arrangement depending on how you decide to rent the space, here’s how:
- Short-term rentals: Typically, owners charge between $150-$300 per night depending on where the property is located, how private it is, and what amenities you offer.
- Long-term rentals: Owner’s choosing this route have the guarantee of a steady income without fluctuations found in the short-term rental market. However, they might generate a lower overall profit by year’s end.
Cover Your Bases
It’s important to be as descriptive as possible about what the renter will get for their money. You should also have photos of your home highlighting its best features so that potential renters know exactly what they’ll get if they rent from you. Be clear about expectations, rental payment due dates, and what isn’t included to save yourself time and energy in the future.
You never know what opportunities will come from renting out space in your home and what bigger ventures it could lead to down the road as you start building your real estate portfolio.
If you are wondering about the possibilities of using your current property to generate income and would like some guidance, contact us!
