#Collaborative post
For the vast majority of households in the UK, a property represents the single biggest asset or investment they will ever make. The property market has been robust for generations, largely beating inflation and also prone to runaway growth – as in 2020, when demand coupled with temporary Stamp Duty relief to result in a more-than-10% increase in property value year-on-year.
But all that growth doesn’t translate into a real return-on-investment until such a time as the property is sold. In the case of family homes, dream homes, or homeowners nearing retirement, this kind of upheaval is unconscionable.
As economic difficulties mount for the vast majority of families across the country, it is more necessary than ever to bring a little extra money into the household, in order to make ends meet. How, then, can you as a homeowner make the most of your investment, and see some money back from your home?
Renting a Room
It may be that you have a spare room in your home, whether once a bedroom for now-adult children, or used as a utility space for storage. This room could be used in your favour, by being converted into a lodging space and rented out.
There are a number of options available for renting individual rooms or parts of your property out. You could use a holiday letting platform like Airbnb to rent your room to tourists and local visitors on short term bases. While inconsistent, this can enable you to control the times at which your home is free from guests.
You could also offer up the room to a lodger. Lodging is legally distinct from full-scale tenancy agreements, and requires less in the way of legal administration. As such, finding a lodger can be a low-effort way to bring in a little more income.
Releasing Equity
For a more direct way of accessing the money held in the value of your property, there are financing packages available that unlock equity in the short-term. If you are above the age of 55, you may be eligible to apply for an equity release mortgage.
In essence, an equity release mortgage enables you to release part of your property’s value in the form of a lump sum, or an annuity to be paid monthly. The mortgage has a rate of interest, but you can choose to pay only the interest; the mortgage is settled on the eventual sale of the house in question, be it when you pass away or move into long-term retirement care.
Renting Your Home
If you are particularly shrewd about your property and financial situation, there may be a way for you to become a landlord and bring in a significant amount of additional income. If you were already planning to move or downsize, you could move to a property and rent out your existing one – using the rent to offset your new mortgage payments and secure a long-term income stream.