8 Ways to Make Money From Your Home
Canadians are a nation of homeowners! New data from the 2011 National Household Survey showed that 69.0% of households in Canada, or 9.2 million of 13.3 million, owned their homes. In addition, four in five (82.4%) couple-family households owned their homes, while less than half (48.5%) of non-family households owned their homes. Just over half (55.6%) of single-parent households owned their homes.
Some ingenious Canadian homeowners who have figured out a way to cash in on their homes while still living in it. You could be sitting on a pile of cash without even realizing it.
Here’s how you can make money from your home.
1. Become a landlord
The plan: Rent a room or part of your home. It could be a basement apartment, a renovated attic, an entire floor or a detached, renovated garage. Renting a room or apartment can allow you to buy a house you might otherwise not be able to afford. With home prices in Canada’s larger cities like Toronto and Vancouver nearing the $800,000 mark in 2017 – this is a good way of increasing the affordability of homes in Canada’s largest cities. Home prices in 2017 are expected to get even higher – this strategy will become even more desirable for thousands of house hunters in Canada looking to buy a home in 2017.
Noteworthy: Rents range from a few hundred dollars to more than $1,000 a month. It may be a good idea to specifically look for a property with an apartment that would help ease the mortgage payments.
Beware: It takes more than just setting aside a room to make an apartment suitable to rent. Each municipality in Canada has individual standards regarding renting, and you’ll need to ensure the space meets zoning codes.
Being a landlord can also be stressful, especially when your tenant doesn’t pay the rent. Carefully screen potential tenants by getting references, especially from previous landlords and employers (including obtaining pay stubs and employment letters). Also, be sure to get a credit check to ensure potential tenants have a good track record of paying their bills on time. Avoid serial renters who move once per year – it will cost you more in advertising and listing costs when you have a property with very high turnover. Its always more profitable to have long-term tenants.
2. Rent your driveway or garage
The plan: Rent out your driveway or garage to people who need parking space (usually in major urban centres) or storage facilities for items that need to be kept indoors over winter, such as boats and motorcycles. Websites such as www.craigslist.org and www.kijiji.ca have categories specifically devoted to parking and storage spaces for rent.
Noteworthy: If you’re in a big city in Canada renting two spaces can bring in a total of 200-300 a month. It’s not a lot of money, but when you’re a student, every bit helps.
Beware: Check to see if your city’s by-law allows renting out your driveway. In some cities – its not permitted. The City of Toronto charges a fine of $25,000 for an individual to $50,000 for a corporation. .
3. Go Hollywood!
The plan: Rent out your home as a set for a commercial, TV movie or feature film. Every province in Canada has a government-run film development corporation (British Columbia Film, for example) that lists properties available to location scouts and producers. The Media Development Corp. also has a program where homeowners can send in photos of their home for consideration in a database of more than 10,000 locations in Ontario featuring more than 200,000 images.
All you need to do to get listed is send in photos of your home. For instance, in this story about a lady who rented her home out for a movie shoot – Whoopi Goldberg and Danny Glover ended up in her kitchen. She was also paid $13,000 for three days of rental at her home in the community of Maple near Canada’s Wonderland amusement park.
Noteworthy: According to the Ontario Media Development Corp., which maintains an extensive database of homes for rent in the province, a ballpark figure for homes rentals can be anywhere from $500 to $5,000 daily.
Beware: A movie shoot can cause quite the upheaval, since you’ll have to move out of your home during filming. You may have a crew of 50 people tramping through your house, so things can get crazy.
4. Host an international student
The plan: Host an international student in your home by providing a separate bedroom and three meals a day. Homestays, as they are called, can last anywhere from a few days to a year, and students can range in age from 10 to 60. The host family is expected to spend quality time with the student, helping him adjust to a new culture and often a new language and provide meals.
Noteworthy: You can earn about $500 to $800 a month per student and can host more than one student.
Beware: You may lose a significant amount of privacy, and students often need alot of hand holding in the beginning to get acquainted with a new city and new surroundings.
5. Start a bed-and-breakfast
The plan: Offer one or more rooms in your home to travellers who are visiting your area.
Noteworthy: Rates vary widely, from about $50 to $200 a night, depending on how luxurious the accomodations are and where you are located.
Beware: Changing sheets. Preparing brunch. Keeping your home tidy. Engaging in small talk early in the morning even if you don’t feel up to it. Running a B&B can require a lot of work and energy.
6. Rent or lease your farmland
The plan: Here’s a fun tip about farming – an estimated 40% of all Canadian farmland is rented, either from the government, or, more commonly, from landlords. It can be tough to get into farming – land prices are high – and for many, it’s the only way it can practically be done. If you own a large parcel of land in a rural area, you can rent it to farmers to raise crops or livestock. On one episode of CBC’s Dragons’ Den – a land-rental marketplace called RentThisLand.com, was pitched. The service allows landlords and renters to work out a deal, without throwing them into an open auction.
Noteworthy: Depending on where you live and what the land is used for, rates can vary from $20 to $200 an acre.
Beware: Renting farmland isn’t as simple as you’d think it is. For farmers, land rental is a huge commitment fraught with many unknowns. In the first place, it can be difficult for a landlord to tell how much they should be charging for their land. Valuing farmland is always a challenge, because the prices of the commodities that those lands produce are always in flux. In addition, different tenants may get different results from the same plot of land, depending on how they’re using it, and how efficient they are. Be careful in assessing all the rental rates as well as the costs.
7. Leverage your home equity
The plan: Apply for a home equity line of credit from your local bank. According to the Canadian Association of Accredited Mortgage Professionals, 22 per cent of homeowners — an estimated 2.15 million Canadian homeowners — had a home equity line of credit in 2014. They owed an average of $57,000. These loans are very attractive because they are easy to qualify for and have lower interest rates than other types of loans (usually around prime). Plus, banks typically require that you pay only the interest expense of the loan.
Noteworthy: This is an easy way to get access to a lot of money without having to wait too long. Many banks will lend you up to 75 per cent of the value of your home, minus any outstanding mortgage.
Beware: Because they are so easy to acquire, you can land in more debt than you can handle. If the market turns downward and your $300,000 house is suddenly worth only $250,000, you’ve lost a lot of the equity in your home and still have the loan to repay.
8. List Your Home on AirBnB
According to AirBnB, there are now 15,000 active Airbnb hosts in Ontario, including 8,600 in Toronto, according to newly released data by the company that shows the number of renters and hosts in Canada continues to rise.
Noteworthy: The average host in Canada typically earns hosts $3,900 annually from renting out their own primary residence for three to four nights a month.
Beware: You need to report all income to the Canada Revenue Agency. For AirBnB you should claim it as rental income using Form T776 Statement of Real Estate Rentals. In 2016, Ontario launched a pilot project with AirBnB to tell its 11,000 hosts in the province to pay their taxes. Airbnb has also agreed to email people who list their homes or other spaces for rent on its site, telling them to report the income and to educate them about consumer protection rights such as cancellations and refunds. Also check your City Bylaws to ensure that this is permitted in your area.