Homeowners who are struggling to keep up with their home loan repayments should consider using their properties to bring in extra money.
If done right, they could cover the difference in the instalment amount they were paying when they first bought their homes, and the current figure which has increased as a result of the rising interest rate.
While working second jobs or running side hustles are helping many people cover the higher instalments, more can be done – and the property itself can help.
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You can also use any extra income to reduce the amount you owe the bank on your bond, and shave years off your repayment period, or even use your home to help you start a business.
The banks always value property ownership, so Samuel Seeff, chairman of the Seeff Property group says you could take a second bond on your home, if there is value in the property, and use the funds to start your own business. Or, you could use a second bond to purchase a second property for rental investment purposes.
“If you are financially able, you could sell the property for a handsome profit which can be invested as a good deposit on a bigger or better property,” he adds as another option.
For homeowners who are, however, cash-strapped and battling to keep up with their bond repayments, here are some other ways your property could hold the key to extra money:
1. Rent out your driveway or garage
Many South Africans do not have space on their properties to park their vehicles, or perhaps they have more vehicles than space available. And with security being a concern, having a safe space to park their cars is paramount.
If you have a garage that is not being used, or even a driveway that will allow someone to park their vehicle off of the road, then consider renting this out. You may even have an empty space behind locked gates that is big enough to accommodate a car or perhaps a boat.
The amount you charge is entirely up to you, and you could advertise your available space on neighbourhood Facebook pages or WhatsApp groups. You could rent your garage, driveway, or unused grass or gravel patch on a daily, weekly, monthly, or even annual basis.
Before jumping up and doing this straight away though, make sure your life will not be inconvenienced by possibly having your own parking space blocked or restricted, or compromising the security of your own home and property. Also understand that the vehicle owner may come and go at odd hours or even be constantly in and out.
2. Take on a housemate or boarder
This has long been a go-to for many homeowners, but if you have not considered doing this, now may be a good time. After all, your guest room that you keep so neat and tidy in case someone ever comes to visit and stay over may be going to waste.
More people are working remotely or taking time out to travel or search for new areas to live in, and you could very well find individuals or couples looking for a room to rent for short periods of time, perhaps a few days, weeks, or months. Whatever you decide to charge them in rent could cover the extra that you now need to pay on your home loan.
Alternatively, if you have an extra room and know that you have no use for it, you could consider renting it out for longer periods of time, and take on a house mate who will not only pay you rent, but can also contribute to other living costs such as food and electricity. If you live close to a university or academic institution, you may be able to rent an unused room to a student.
3. Rent out storage space
If you have a spare garage, room, or outbuilding, but would prefer to not have people coming in and out of your life, you should consider renting it out as storage space. With so many people semigrating, emigrating, or just relocating, there is a growing need for storage space – either for short periods of time or longer.
The trend of living in smaller homes also means that people moving from bigger properties will have furniture or other property that they do not want to get rid of but cannot accommodate in their new homes. This has created many opportunities for people with unused spaces to rent these out for long periods of time, which is ideal as there won’t be a constant need for the owners to be checking on or needing things from their storage rooms.
Before you do this though, you need to make sure you have a written agreement in place to protect you against people coming and going from your property constantly, and without notice. You will also need to contact your home building and contents insurance provider to establish whether you will need to pay more on your insurance premium (which you could add to the rental), and who will be responsible for any loss or damage to the stored property.
4. Rent out a room for a home office
If you have an extra room in your home, or an unused outbuilding, but would prefer to not have people living with you, then you could always rent it out as a home office.
With remote working becoming the norm, more people – and even entrepreneurs, need a set office space in which to work. After all, not everyone who works from home has an extra room to dedicate to their work or is happy operating from their bed or dining room table. Some people may even have the space but prefer to leave the home to go to work and return when they are done.
Another advantage of this is that you will always have someone on your property when you are away at work or out of the house for other reasons.
All you would need to do is ensure that the space has a desk and chair – possibly even shelving, strong and reliable WiFi access, and enough plugs to accommodate laptops, computers, or other electronic equipment a remote working tenant may need.
Make sure, however, that you incorporate any increases to your WiFi connectivity or electricity costs into the rental and also consider the by-laws if your tenants will be having clients visiting during the day. Ideally though, you will want a tenant who will be working alone and not having visitors or clients.
If you have an inverter or generator to keep power and connectivity on during load shedding or power outages, you could also charge a little more on the rent.
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