A home, on its own, is a valuable long-term asset. The passive nature of this investment, however, means a majority of homeowners don’t profit from their properties until after they’ve sold them.
The good news is, there are a variety of ways you can make money off your property without selling it. If you want to get the most value out of your home, take a look at the following ways you can turn your home into an active asset:
- Put a room up for rent
Generate extra income by renting out your spare bedroom or building a rental suite. Rooms with private bathrooms and entrances make these more desirable to potential tenants and go for higher rates.
This option is great for those who are near colleges or universities because students are always looking for lodging options close to their schools. You also wouldn’t have a shortage of possible tenants.
When choosing tenants, always get a background check and interview them in person. You should only share your home with someone you feel comfortable with.
Before letting them move in, make your home tenant-proof. Change the locks of the rooms you don’t want your future tenant to access like the master bedroom, closets, and the like. Put your valuables in a fireproof vault for safekeeping.
- Start a bed and breakfast
For those who don’t want a full-time tenant and have several spare bedrooms, opening your own bed and breakfast is a great idea. This is especially ideal for those who live near the beach or tourist destinations.
With apps such as Airbnb and Vrbo, finding guests becomes easier. For a couple of nights a month, you can reap a significant profit. Keep in mind, though, that starting a bed and breakfast comes with hosting duties. It’s best to look into the details of running this type of business before you start.
- Make the most out of your storage space
Renting storage units can be quite costly. With that in mind, you can take the extra storage space you have at home and repurpose it as a cheaper alternative. Clear out your shed or garage, install shelves, and separate these into sections to accommodate different renters.
This method is ideal for those who don’t want to share their home with tenants or open their home up for guests.
Some tips to keep in mind
Turning your residential property into an income-generating asset requires a lot of business knowledge. Here’s a list of things you need to know before starting your business:
- Do your market research – Keep abreast with current market trends and rates for you to have a competitive advantage.
- Create a set of goals – List down what you want out of your investment to figure out which method is right for you.
- Learn the rules and regulations – Know what you can and cannot do with your property. Some income-generating methods may not be allowed in your neighborhood because of zoning laws and HOA rules.
To know more about how you can turn your property into an asset, get in touch with expert real estate agents David & Sunny. Give us a call today at 650.489.6251. Or you can send an email to davidandsunny(at)compass(dotted)com