Guest Blogger: Tips for Making Extra Money Renting Space in your Home

Guest Blogger #451, Entry #1076, April 9, 2012

Many people are looking for additional ways to earn income since the recession hit, and while some will take on second (or even third) jobs in order to bring home the bacon, or sell off stocks at a loss just to get some cash in hand, those that are smart will maintain their savings, skip the extra labor, and think of ways to create a cash flow via passive income. But what is passive income? It’s any way you can make money without doing extra work. It can come from interest earned on stocks or savings, cash-back credit cards, selling stuff you already have, or owning a rental property, for example. But if you have already done these things (or alternately, getting them started is beyond your means) you may be looking for other options. And if you own a house with extra space, the money you seek could be a lot closer to home than you think.

Should you have a rental space in your home?

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Consider your rental options

Most adults aren’t terribly keen on the idea of opening their home to a stranger (or even a friend or family member), but beggars can’t be choosers. If you need more money you’re going to have to compromise somewhere, whether it means cutting your expenses or getting another job. And if you’re worried about losing your home, what better way to save it than to get someone else to help you pay for it? It may not be an ideal situation, but it could be the easiest way to bring in the extra cash you need to keep you afloat until the recession ends. And you have a few options for going about it.

Rent out a room

The first and easiest plan is to simply rent out a room to a regular tenant. Make the room habitable, draw up a rental or lease agreement (you can hire an attorney or find templates online), and then create a classified ad specifying the type of renter you’re comfortable with. In most cases you’ll have to offer access to common areas (kitchen, laundry room, etc.), but you can certainly make rules pertaining to house guests, pets, utility payments, upkeep (inspections) and so on. As long as you present your expectations up front and the renter agrees you can maintain the upper hand in your own home.

Dedicate a portion of your home into a rental unit

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Rent a portion of your home as a rental unit

Another option is to fix up a space as a rental unit. If you have outside access to your garage or basement, for example, you could build out an apartment, close off your house, and create a self-contained unit. You just need to check with your local zoning board to obtain any permits and inspections required by the city. Of course, the building process may cost you a bit, but if you’re okay with spending money to make money, this is probably a better option than investing in the stock market at the moment.

Consider creating a bed and breakfast

Finally, you can opt to rent out space in your home by the day rather than monthly rental or lease. It may not measure up to Hawaii Vacation Rentals, for example, but you could create a cozy little B&B (again, with proper permits) or simply list one room on a site like Airbnb, which travelers use to find cheaper accommodations than they’ll get with hotels. Whatever choice you may, it could mean a lot of extra cash in your pocket at the end of the month with very little relative effort and expense on your part. So don’t hesitate to turn unused space in your home into the cash cow it could be. In this economy, this form of passive income could be the godsend you’ve been praying for.

For more home organization ideas on Stagetecture, click here.