Your home is highly likely to be the single biggest investment you have ever made, let alone currently own. Property values are consistently rising, and there is always demand on the market. But the money you have locked up in your property is not immediately accessible. In times of economic strife such as these, what can you do to monetise your investment and bring more in?
How Can Your Monetise Your Property?
Whole Property Rental
One of the foremost methods to monetise your property is through long-term property rental. If you have access to another property, or the means to obtain another, you can turn your first property into a rental accommodation.
Renting your home to tenants is a little more complicated than many make it out to be, as there are legal standards to comply with and regular maintenance tasks to undertake. However, if you have the time to manage the rental of your home, you can guarantee a regular income from your home in the process.
Room and Space Rental
If you do not have the means to move home while retaining the initial property, you do not have to preclude yourself from the possibility of earning money via rental. Rather, you may be able to monetise parts of your home by renting them out, while still residing in the property yourself.
There are two key ways in which you can do this. First, you could offer a spare room in your home to a lodger.
Lodgers are typically less robust an income source than fully-fledged tenants, but are also subject to less red tape – making lodgers a much simpler undertaking than assured tenancy.
Secondly, you could rent out your empty property for professional or logistical purposes. You may have a driveway, but no car; you could rent your driveway to a commuter who works close by. Alternatively, you may have spare garage space, which you could refurbish and rent out to a professional for storage or office purposes.
Equity Release
Many of these solutions require maintenance and oversight, and in some cases can even interfere with your quiet enjoyment of your own home. For those reaching retirement age, there is another option that preserves the sanctity of your home while still returning you the money locked up in it: equity release.
If you are over the age of 55, you can use an equity release mortgage to release some of the value of your home. This is returned to you as an advance payment or an annuity, on which you can pay just the interest with the right deal. The money is only repayable on the sale of the house, meaning you can enjoy it and its worth in advance of selling.
Downsizing
There is also the possibility of using a house move to generate more income for the long-term. It may be that you are moving closer to family, or moving to a more accessible home for later life. By making shrewd decisions regarding new home size and location, you may be able to find a new home at a much lower price than the market value for your existing property.