If you’re a homeowner, your house can do more than just consume cash flow–it can generate it as well!
Rent out a unit, basement, or room of your house at a price that helps offset the cost of your mortgage. It’s really that simple!
Let’s consider an example that demonstrates why this strategy is so effective.
Suppose you’ve saved enough money to put a down payment on your first home. Good for you! You’ve done the legwork, and discovered that your mortgage payment will be around $1,000 per month. You’ll also need cash for property taxes and homeowners insurance, too. Even though you’re glad you’re in a home of your own, you might start wondering if you’ve bought a money pit that will consume your cash flow for the next 15 to 30 years.
But you’ve also bought a potential source of income, if you think a little outside the box.
See, your house has a finished basement that’s begging to be transformed into a rentable space. All told, you could rent it out to a friend and put those funds toward your mortgage.
By simply utilizing space that you already own, you can unlock a revenue stream that can help offset your mortgage payments!
That extra cash flow can cover daily expenses, pay down the house faster, or help you begin saving and investing.
This strategy, called “house hacking”, may not be for everyone–it favors homeowners with duplexes or finished basements. Plus, it requires the homeowner to become a landlord, a role some may not care for.
If you have the space, consider renting out a slice of your home to someone you trust. It’s a simple way to leverage resources you already have to generate the cash flow you may need!