Everyone knows you can make money while working from home, but how about actually generating cash out of the investment you’ve made by purchasing a home or other type of property? Due to fast-rising values in today’s competitive housing market, homeowners are experiencing increases in their home equity. In fact, approximately 80% of homeowners now have tappable equity, which translates into cash which could fuel the economy. If you’re smart about the financial moves you make, you could increase the value of your home while also strengthening your savings account in order to prevent debt and other financial struggles.
Inquire About Equity Release
Equity release allows you to unlock the economic potential of your home and turn it into cash. While you might have to pay interest on this type of cash, you can use it to further invest in other properties or separate sources of income that can ultimately pay off more in the long run. You’ll find that one of the most popular ways to tap into your home equity is to take out a reverse mortgage loan. With this type of loan, you won’t make monthly payments on what you’ve taken out, you’ll simply owe the balance once you move out of or sell the home, as you’re basically using the property as physical collateral. You can receive this money as a lump sum, in periodic payments or even as a line of credit, so it’s important to first asses your goals for taking out the money in order to figure out what option is best for you.
Rent Out a Bedroom
With the popularity of Airbnb on the rise, deciding to rent a room out can be a lucrative and fun way to make a little extra cash from your home without selling it or taking on more financial responsibility. Currently, more than 2.5 million people have listed their properties on Airbnb, making an average of $20,000-plus a year depending on the location in order to pay off mortgages faster or create a nest egg for retirement. Before renting out a room, however, you’ll want to check with your local state regulations in order to ensure you’re complying with all laws and requirements such as insurance. You’ll need to factor in cleaning fees and other small costs, but if you are smart about how you rent, you can find yourself making extra cash while hosting interesting people from all over the world.
Investing in Your Future
Being a homeowner is a big responsibility that also carries with it a lot of financial benefits and opportunities. To further invest in your future, both personally and financially, it’s worth assessing just how much equity you have tied up in your home in order to optimize your investment. Taking out loans against your property is a smart way to invest in other financial opportunities while financing your mortgage, but you’ll want to remain well-informed of all of your options and the consequences before you make a final decision. In the meantime, consider renting out part of your home in order to increase cash flow. Either way, you’ll be pursuing streams of income that you can put back into the overall value of your home.