As we look at ways to pay down debt in various blog posts on caraczarnecki.com, one of the suggestions is to generate extra income. There are many ways to do that, but in this post, we are going to discuss five ways to generate income using your home. This can be done while you live in the home, or in some cases you can generate income from your home while you are away.
1) Let’s start with the option that is the most commonly known: Airbnb. Founded in 2008, the company is now worth billions, with millions of guests using the services. You can rent an entire flat in London, a beach house in Oregon, rent a room as you are attending Spring Training in Phoenix, or while visiting New York City. People are even creative enough to rent a tent in their backyard, put a mattress in the back of a Tesla, or put a star-viewing dome in the top of a Volkswagen Bus for your star gazing adventure. The possibilities are as limitless as your imagination.
There are however a few things you should consider before putting your home, or a room in your home, on Airbnb.
A) You should be a homeowner. If you are renting a house or apartment, there is a 99% chance there is a clause in your lease that forbids you from using your rental to generate income. If you are renting, there are ways to negotiate with your Landlord to make it all legal. Do some research on this topic and see what your lease says about subletting or running a business from your rental. Litigation would cost much more than you would make through Aribnb so if it's not legal, it's not worth it.
B) If you live in an area with an Home Owners Association (HOA), read your CCnR’s to make sure your HOA allows short - term rentals. The rules and regulations will be different for each association and will vary depending on whether you are putting your whole home on Airbnb or house-sharing, which is putting a room in your home on Airbnb while you live in the house too.
C) Set it up as a business. Airbnb sends you a 1099 at the end of the year, which means you are self-employed and they do not take out any taxes. I highly recommend contacting an accountant or CPA that is familiar with small businesses so you know how to minimize your tax payments by maximizing your deductions. A side business like Airbnb could set you into a higher tax bracket, therefore causing a higher tax rate. Extra income is good, but keeping most of it in your pocket is even better.
D) Protect yourself. I am neither a Lawyer nor a CPA and cannot give legal or accounting advice, however I can tell you that it has been recommended to me to set up LLC for Airbnb, to protect myself and my assets legally should there ever be an accident or lawsuit. Also, check with your homeowner’s insurance company to see if you will need any gap insurance, or whatever your insurance company calls it. Airbnb does offer insurance policies for their hosts, you just want to make sure there aren’t any gaps in coverage. Consult with these professionals in your area to make sure you are protected.
Airbnb Discount Code – If you have never created an Airbnb account before, follow this link for $40 off your first stay. http://bit.ly/CCAirbnb. If you have never stayed as a guest at an Airbnb location, I highly recommend doing that before deciding whether or not you want to become a host.
2) If you like pets more than people, then Rover may be more your style. Rover is the nation’s largest network of Pet Sitters and Dog Walkers. If you register as a Sitter, you can choose whether you want to pet-sit in your own home, house sit, provide drop-in visits, provide doggy daycare, or provide dog walking services. Similar to the points above in the Airbnb section, make sure pet sitting is allowed in both your home and your neighborhood. Consider setting up an LLC and talk to a CPA. Run it like a business so you have deductions to offset your income when tax time rolls around. Also, find out if you need additional homeowners insurance to protect yourself and your cute, cuddly clients. To register as a sitter, go to https://www.rover.com.
3) If people and dogs aren’t your thing, maybe stuff is. A company called Store at My House facilitates peer-to-peer storage. This company helps connect those with empty space to those who need it, at a fraction of the cost of commercial storage facilities. List your empty space, have minimum interactions with your hosts at your own convenience, and make consistent money every month. To list your space, visit https://www.storeatmyhouse.com/.
4) Depending on your location, you may have a metaphorical gold mine hidden in your driveway. Are you near a venue that often has overflow parking? Are you in a City with parking scarcity? Do you live in an area that doesn’t have RV restrictions? Through sites like JustPark, you can rent out your available space. This started in the UK and has branched out to include the U.S. As you can imagine, this is especially popular where parking is most scarce, such as places like New York City. Visit https://www.justpark.com/ to list your parking space.
5) If you live near a University, offering your home to exchange students may be an option for you. Depending on the school, exchange students can be here from six weeks to a semester or two at a time. They travel to the U.S. for study abroad programs or to learn English. This is not just limited to students though; guest lecturers or faculty members occasionally travel as well. To be put on the list of host families, contact your local language school, community college, or University. To find language schools near you, visit the International Association of Language Centers, or https://www.ialc.org/.
While these are some great resources and ways to generate income by utilizing your home, this is certainly not a comprehensive list. What are some income generating ideas you have that utilize your home?