New research from the US has found recent homeowners have been finding increasingly creative ways to generate income and offset expenses.
Realtor manager of economic research George Ratiu has revealed recent homebuyers are becoming more comfortable with renting part of their property, such as a spare room, outdoor space or parking lot.
“As the next generation of home buyers has embraced ride-sharing and short-term rentals, it’s a natural next step that they begin to think of their biggest asset, their home, as a potential income stream,” Mr Ratiu said.
“For people looking to take advantage of the sharing economy, in addition to traditional approaches it may be worthwhile to explore creative solutions, such as listing your home as a vacation rental when you leave town, or renting your outdoor space or pool.
“Even a small amount of income each month can multiply over a year or more and can turn into bigger returns.”
According to a HarrisX US-based survey, 67 per cent of recent homebuyers would rent out part of their home if it had a separate entrance, kitchen and bathroom.
Additionally, 32 per cent of consumers have already rented out a room, space or outdoor feature of their property.
The most common rental agreements include taking on a long-term roommate (10 per cent) or short-term holiday rental, such as Airbnb (8 per cent).
However, 7 per cent of survey participants were renting out their outdoor parking lot, while 6 per cent were renting their yard or pool.
When travelling, 6 per cent have rented their entire home.
Arguably the most self-sacrificial, 7 per cent have lived in a smaller unit on their property while renting out the main house.
Consumers said that the biggest reason to rent out part or all of their home was:
- Extra income to save (53 per cent)
- Extra spending money (37 per cent)
- Lessen the burden of general monthly expenses (35 per cent)
- Offset major home expenses such as the mortgage (29 per cent)
- Covering a family vacation (16 per cent)
When considering rental preferences, 52 per cent of participants felt comfortable renting a part of their home, as long as it had its own entrance, kitchen and bathroom, and the rental was with somebody they already knew.
Another 30 per cent would be comfortable as long as they could personally choose the renter beforehand, while 29 would be comfortable with a renter who was vetted by a third-party, including apps.
Surprisingly, 16 per cent of people would rent a space to anyone if they really needed the money.
Recent buyers were less picky about vetting, with 32 per cent of participants suggesting they would rent to someone they know, while 23 per cent were open to anybody.
Long-term rentals (24 per cent) were preferred over medium-term (21 per cent) or short-term renters (18 per cent).
“It is important to keep in mind that while today’s sharing economy may make it sound easy to make rental income off of your home, there are many factors to consider before taking the leap,” Mr Ratiu warned.
“You should familiarise yourself with tenant rights in your state and locality, and understand any community restrictions.
“Along with those, making sure that renters have been properly vetted and that home insurance will cover any potential damage, are additional things to look into before inviting renters into your home.”