How Can You Get Money Back from Your Home?
With the economy struggling, energy prices rising and the average grocery shop going up, the average family is in for a difficult year. Even relatively well-off families and middle-class households are feeling the pinch, leading to an increased vigilance regarding ways to scrimp, save and earn more money.
Ultimately, your home is a supremely valuable asset – but with its worth inaccessible without selling up, and with the significant costs attributed to keeping your home running, it’s only right that you’re seeking for ways to get a little back. With a few different approaches to your home and how it’s handled, you can make your most valuable asset work for you – and grow your wealth in the process.
Renting Your Home
Renting your home out remains one of the most lucrative ways to generate money using your home. The rental market is, and continues to be, hugely robust, with rising demand pushing up the average rent in the UK by more than 8% in recent months. If you have a second property, or the means to move further out to a cheaper rental property, you can rent out your original property and turn a meaningful profit in the process.
Renting a Room
If you do not have the means to move out of your home, you could instead generate money by renting out a part of your home – for example, renting a room out to a lodger or tenant. The rental income would be less, but the overheads associated with property upkeep would be easier absorbed since you would be continuing to live there yourself.
Another way you could monetise the spare rooms in your home is by listing them on a holiday letting site like Airbnb. Becoming a host for holiday lets can be a little more involved than managing a live-in tenant, but the profits can also be significantly higher.
Equity Release
If you are over the age of 55, you may be eligible to use an equity release mortgage to release stored equity in your property. An equity release is essentially a mechanism by which the value of your stake in your home is paid back to you as an advance loan. The lender recoups the money by selling the home on your behalf when you enter into long-term care or pass away – meaning you can enjoy the value of your biggest asset while continuing to live in it.
Downsizing
If you have an abundance of space in your home, and are not quite willing to weather the additional responsibilities of renting out your free space, you could always opt to downsize. By moving into a smaller, cheaper property, you can pocket the difference in value between your old and new property and live comfortably on that difference.
