Owning a home is a great way to build up your wealth, but is also very expensive. If you can identify ways to reduce costs, you can reduce the likelihood of having to turn to debt to cover expenses.
“From value-added renovations to home renovation tax credits to rental income potential, your home can be making money for you. There are many ways to use your home to increase your savings and/or improve your cash flow,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
Here are some tips on how you can use your home to help make money.
Be a landlord
If you’ve got a room to rent, you could be sitting on an income opportunity. Perhaps you are considering renovating part of your home to make it a larger rental. Not only do you have the opportunity to generate rental income as a landlord, there are often home renovation tax credits extended to these improvements.
You are also eligible for other tax deductions related to renting.
It’s not just rooms or space in your home that can generate income, do you have a driveway or laneway that sits vacant? You can rent out space for parking. In cities where parking is at a premium, this can generate a fair bit of money. If you happen to live close to an area that hosts events (i.e. a stadium or festival grounds) you can tap into that to rent out parking as well.
If you are considering renovating your home, why not take on projects that will increase your home’s value? Kitchen and bathroom jobs tend to yield the biggest return on investment, but also are among the most costly to perform. Reduce costs by DIY wherever you can with your renovations. These are financial benefits that you can recuperate when you sell your home.
Tap into equity
“Are you struggling with multiple debts? It might be worthwhile to tap into your home’s equity to consolidate your debts, which could free up cash flow and reduce your interest charges. Before you venture down that road, make sure that all the math adds up in your favour,” says Schwartz.
There can be costs to refinance your mortgage as well as interest penalties. Although mortgages tend to have lower interest rates than credit cards and most installment loans, you’ll be extending the debts over a longer period of time, which can cost you more.
Home based business
Do you have a hobby or other skill that could translate into a part-time job? This can be an excellent way to boost your cash flow. If you’ve got room in your home to dedicate to a home-based business, not only do you benefit from the extra cash, you may be eligible for tax deductions that can help you save money.
Do you have large outdoor space? Would it be suitable for outdoor events? People are always looking for scenic or unique places to host events and parties. If you’ve got the space to dedicate, this could be a viable income option as well.
What about growing your own produce in your yard? You can shave down a lot on your grocery bills by growing your own. If you’ve got a sizeable garden and have the capacity to produce a fair amount of produce, consider selling it at a local growers market, or set up a roadside stand.
Do the costs of homeownership have you struggling to make ends meet? Reducing your debt load will help. Call one of our trained credit counsellors at 1-888-294-3130 or get started with our online debt analysis.