Data from the Federal Reserve reveals that as of the end of 2021, consumer debt reached an unprecedented $15.6 trillion, with a significant increase of $333 billion in the fourth quarter alone, marking the most substantial quarterly rise since 2007. Furthermore, the annual increase was the highest since 2003. Mortgages were the primary contributor to this surge, accounting for 87% of the total consumer debt. Mortgage balances saw an explosive growth of nearly $11 trillion by the year’s end, with a substantial $890 billion added in the last quarter. The year also set a new record with mortgage originations surpassing $4.5 trillion.
Given that 65.5% of Americans own homes as of April 2022, the weight of mortgage debt is considerable, especially for those facing financial hardship or unexpected expenses. However, there’s a silver lining. Your home can be a source of revenue, often through passive income streams that require minimal active effort or investment. This additional income can be directed towards debt repayment or routine expenses such as property taxes and utilities.
Here are 15 practical strategies to generate income from your home.
1.Consider acquiring a housemate.
Sharing your living space is a traditional method of reducing housing expenses, particularly for students or early-career individuals. For homeowners, acquiring a housemate can also become a source of additional income. By sharing your space, you can accumulate extra funds to accelerate mortgage payments or divide utility expenses. A compatible housemate might also share in household duties or provide companionship if you’re living alone.
Nonetheless, cohabitation can present its challenges, especially when one party owns the property and may need to set boundaries. To prevent issues, it’s advisable to create explicit guidelines and request that housemates commit to a long-term lease agreement.
While online listings, such as those on Craigslist, are an option for finding housemates, personal referrals often yield the best matches, ensuring compatibility and reliability in meeting financial obligations.
The financial benefit of having a housemate varies. With one housemate, you might recoup approximately 30% of your monthly housing costs. If you were to have three housemates, that figure could increase to about 50%.
2. Convert Your Home into a Rental Space.
If your property has extra room and local zoning laws permit, you could transform your home into a rental space. Options include creating an in-law suite or a basement apartment.
Alternatively, if space and regulations allow, you might repurpose your garage into a suite or erect an additional dwelling on your property.
Before embarking on such a project, it’s essential to understand local regulations. Typically, a lawful rental unit must have an independent entrance and be equipped with its own kitchen and bathroom.
This arrangement offers more privacy and space than sharing your home with a roommate, potentially allowing you to command a higher rent.
Nonetheless, it’s important to assess the financial aspects before proceeding. Estimate the potential rental income and determine when the investment in renovations will begin to pay off. To gauge local rental rates, tools like Rentometer can be invaluable.
3. Explore the benefits of hosting on Airbnb.
Dive into the thriving world of home rentals with Airbnb, one of the most prominent platforms in the market. Whether it’s a charming secondary home, a cozy guest house nestled in your garden, or just an extra room, Airbnb empowers you to connect with travelers seeking a place to stay. Enjoy the flexibility of sharing your space on your terms, renting it out at times that align with your life.
In the bustling markets of North America, the average Airbnb host earned $41,026 in 2021, and some hosts see even higher profits. Your income potential varies based on your location and the type of accommodation you offer. For instance, a single room with shared amenities typically yields less revenue compared to a fully equipped basement apartment with a private entry or an entire home. Explore how optimizing your space can enhance your hosting earnings.
4. Offer space on your property to individuals with tiny houses.
The trend towards living in tiny houses as a means of simplifying life and reducing expenses is on the rise. However, one of the significant challenges faced by tiny house owners is finding a suitable place to situate their home, especially since many local regulations require them to be located adjacent to standard houses.
If you own a spacious plot of land, particularly in rural areas, you could generate income by leasing it to those with tiny houses. Providing additional facilities such as water, electricity, or septic connections can justify a higher rent.
Even without these utilities, your land may still be attractive to renters. Tiny houses are often designed to be self-sufficient, with solar power, water collection systems, and composting toilets.
Rental prices on platforms like Try It Tiny can range from $350 to $1,500 monthly, varying by location and the amenities offered. Before leasing your land, it’s crucial to verify that doing so complies with local zoning and county regulations.
5. Store other people’s stuff.
Do you find yourself with ample unused space at home? Perhaps you have an empty garage or shed that’s just gathering dust. Why not convert that idle space into a source of income by renting it out for storage?
In today’s market, people are actively seeking budget-friendly alternatives to traditional storage options, which can average a steep $108 per month and are subject to price hikes.
Not only can you offer this space for rent, but you can also cater to a variety of storage needs. Short-term renters, such as families in the midst of relocating, often require temporary solutions for their belongings. On the other hand, you could also consider long-term arrangements, like seasonal leasing of your garage for larger items like RVs or boats.
Moreover, think creatively about how to utilize your space. For instance, a relative of mine leases his spacious garage to a mechanic, thereby creating a steady stream of additional income. Explore the possibilities and turn your spare space into a profitable asset.
6. Consider sharing your driveway for some extra income.
Platforms like CurbFlip.com offer you the opportunity to advertise your parking space for rent during times you’re not using it. They provide options to set rates for different durations—hourly, daily, or monthly—and do not charge for listing your space. When you set up your advertisement, you’ll need to connect a bank or PayPal account to collect payments from those who rent your spot.
Be aware that parking spaces near public transit hubs and popular attractions often see higher demand. Locations near sports arenas, music venues, and fashionable districts are particularly sought after. In bustling cities, both locals and visitors might prefer the convenience of parking on your property over the struggle for street parking or expensive parking garage fees.
Do keep in mind, however, that these services aren’t completely free. For instance, CurbFlip deducts a 16% fee from successful bookings.
7. Run a Bed & Breakfast
Operating a Bed and Breakfast (B&B) could be a viable use for your property if you have multiple spare rooms and are aiming to increase your rental revenue. Indeed, the more rooms at your disposal, the greater your potential gross income.
However, it’s important to understand that B&Bs are typically not high-profit ventures. As Nancy Sandstrom, an experienced B&B startup instructor and former innkeeper, cautions, entering this business isn’t about amassing wealth. While it is possible to earn some profit and offset a portion of personal expenses, the endeavor is more about embracing a particular way of life. The significant financial gain often comes when you eventually sell the property.
Moreover, B&B operators are usually expected to take on roles beyond merely renting out rooms. This involves providing breakfast to guests, possibly undertaking property improvements, and investing in items such as fresh towels and linens. Additionally, securing various licenses and permits from local authorities is a requisite part of the process.
8. Rent out your back yard
Explore earning potential with your property’s features. Have appealing attributes such as a spacious pool, an expansive backyard, or a stylishly refurbished barn? Consider promoting your property’s facilities for others to enjoy at a rate you set, be it hourly or for an overnight stay.
Moreover, various applications can facilitate this. For example, Sniffspot transforms your space into a private play area for local dogs, providing them a spot for fun or training. Similarly, Swimply allows you to offer your pool for others to use at a set hourly fee.
While these opportunities may not offset your entire housing costs, they can significantly aid with recurring expenses like upkeep and insurance.
9.Transform your residence into a cinematic highlight.
Your home could fetch a daily rental fee ranging from $1,000 to $5,000 or potentially even higher for film shoots. Often, the standard daily rate aligns with your monthly mortgage — for example, a home with a $2,000 mortgage could garner $2,000 per day. However, earnings can fluctuate based on your home’s location, size, and the production’s budget.
Producers on the lookout for local filming locations can discover homes like yours through Set Scouter, a platform designed for listing properties.
While the potential for high earnings exists when renting your home for filming, it’s crucial to remember that this isn’t a steady stream of income. You might host three commercial shoots in a single month, then face a dry spell without bookings for a year or more. Therefore, it’s wise to view this opportunity as a bonus, rather than a consistent source of income.
10. Organize Gatherings in Your Spacious Property
Having a spacious property allows you to organize grand occasions like nuptials and musical performances. Such events often require obtaining particular permits, setting up outdoor electrical systems, and arranging for adequate restroom facilities, which can come with a hefty price tag. However, a single large-scale event has the potential to bring in several thousand dollars in a day.
Those situated in pastoral or farming locales have the opportunity to showcase their regional culinary practices and heritage by initiating agricultural tourism activities. These can include seasonal labyrinths, tastings of local wines, and small-scale markets. Additionally, I know of family acquaintances who have refurbished an old barn, which now serves as a charming venue for celebrations such as baby showers and bridal events.
11.Offer in-home pet sitting services
Offer in-home pet sitting services Are you passionate about pets? Consider offering your services as a pet sitter through a platform like Rover.com, which boasts a network of over 150,000 sitters with a focus on dog boarding within the sitter’s own home.
Though a background check is part of the process, formal certification is not a prerequisite. The platform also provides access to various training materials and applies a 20% commission fee for each pet care booking. As a personal testament, I’ve had a great experience using Rover. It’s a relief to know that when I’m away, my dog can stay in a welcoming home rather than at a kennel. Plus, after a few stays, my dog eagerly anticipates her time with the sitter.
12. Begin cultivating your own produce oasis.
On a modest plot in a suburban area, it’s entirely feasible to nurture an array of fruits, vegetables, or blossoms for commercial purposes. If you happen to possess a larger expanse of land, the diversity of what you can grow multiplies significantly. Many regions are familiar with the charm of seasonal roadside booths brimming with vibrant flowers, succulent fruits, assorted nuts, and freshly harvested veggies.
As awareness about the integrity and safety of food sources heightens, the demand for locally-sourced, fresh produce is on the rise. With a knack for gardening, you can channel this demand into a profitable venture by offering your garden’s bounty at community farmer markets or directly from your homestead, should you own one.
13. Turn your unused items into cash
Or let them out for a profit. Many of us have wardrobes with unworn garments and kitchen cupboards filled with seldom-used gadgets. Plus, there might be baby equipment in the attic or garage that’s no longer in use.
Consider this when you’re tidying up this spring: you can put these goods up for sale on platforms like Tradesy, Poshmark, Gazelle, and OfferUp. Remember, your items should be in good shape, and be aware that these platforms may take a commission for their services.
14.Starting a home-based business
Starting a home-based business can be an exciting venture, whether you’re looking for a side hustle or a full-time occupation from the comfort of your home. The beauty of the digital age is that numerous business ideas require just a computer and an internet connection to kick off. Here’s a list of twenty home-based business ideas to inspire your entrepreneurial spirit:
- Begin a blogging journey, sharing your expertise or passions.
- Offer your skills as a freelancer across various platforms.
- Self-publish your literary works and market them online.
- Craft and market handmade items from your workshop.
- Refurbish old furniture, giving it a creative, modern twist.
- Create content for a podcast or a YouTube channel.
- Operate a virtual call center offering customer support.
- Provide online educational courses or tutoring sessions.
- Start a home bakery, selling your delicious baked goods.
- Offer a catering service for local events and businesses.
- Open a childcare service in your home for your community.
- Set up a barbershop or salon in a designated space at home.
- Manage a dropshipping business, selling products online.
- Provide at-home car-wash and detailing services.
- Offer a drop-off repair service for electronics or appliances.
- Give business consulting advice tailored to specific industries.
- Offer accounting and tax preparation services remotely.
- Launch a subscription box service with curated items.
- Teach private lessons, such as music, from your home.
- Build an investment portfolio with stocks or real estate.
Each of these ideas can be initiated with minimal upfront costs, making it easier to start today and grow your business from home.
15. Unlock the potential of your property’s value.
The portion of your property that you’ve successfully paid for is your equity. Diane Costagliola of Bankrate clarifies that it’s the gap between your home’s market worth and the remaining mortgage balance. For numerous individuals, the equity derived from owning a home is a significant asset in wealth accumulation over the years. As you gradually reduce your mortgage’s principal and your home’s market price rises, your home equity naturally expands.
“Home equity opens a myriad of prospects for homeowners since it serves as an excellent means for fiscal savings and funding,” observes Glenn Brunker of Ally Home. “To illustrate, the equity accumulated in an initial property can eventually fund the down payment necessary for a bigger home to accommodate a growing family’s need for more space. It represents a proven strategy for wealth enhancement.”
Home equity is often viewed as a preferable option for financing major expenditures compared to credit cards or personal loans with high interest rates, Costagliola adds. The most advantageous applications of home equity include consolidating debts, expanding your business, or covering costs for unforeseen events, educational pursuits, or matrimonial ceremonies.
Typically, home equity can be tapped into via Home Equity Lines of Credit (HELOCs), home equity loans, and cash-out refinancing options.
Essential Considerations for Homeowners Seeking Additional Revenue
Owning a home presents unique financial opportunities not typically available to renters. However, before you embark on this path, it’s critical to weigh two key considerations.
Initially, assess the potential insurance implications. If your home encounters incidents like fires or floods, utilizing your home in ways not covered by your insurance policy could nullify your coverage. Ensuring that your property is adequately insured is paramount, and this includes obtaining all necessary licenses and permissions.
Secondly, be wary of financial overreach. Home renovation projects, for instance, can be both physically and financially strenuous. Moreover, not everyone is suited to manage a home-based enterprise, such as a bed and breakfast or hosting events.
If you have diligently pondered these factors, then ponder no more about the potential of profiting from your home—consider starting now.
