Once upon a time, buying a house was part of the big Australian dream. We bought into that dream when we were in our early twenties and despite entering the property market early, it hasn’t been a dream to maintain the finances to sustain our dream house. We were ready to buy, but it’s taken a lot of hard work and input from my parents to make the best purchasing choices for our family home. Once you purchase a property, you’re under the contract of paying a debt back for 30 or so years which can sound depressing, but there are simple ways to make your property pay off itself. It’s all about turning your property into an income earning asset while you live in it. Here are 6 ways your home can pay itself off so you can own it sooner.
1. Turn unused space into a studio that can be rented out to a student or a single person. There are a number of ways to create a new dwelling in an existing property. For double storey homes it could be as simple as converting or building in downstairs. For single storey homes, why not look at converting a garage. If you have a large yard, why not set up a container home? There are council regulations that must be abided by if you are to rent out a studio on your property or build a separate dwelling on your land. Make sure you check with your local council on what you can do (the laws are different for each shire), but once these guidelines are met, the income you earn from renting out this space can dramatically reduce your mortgage.
2. Rent out space in your home that you don’t use. We have a double car garage, but only one car so there is a lot of space that we can rent out to someone who requires a cheaper alternative to storing their gear in a storage facility. Check that your home and contents insurance covers your renters goods. To advertise storage space in your home, advertise on space out, gumtree or via word of mouth.
3. Rent out a spare room. This kind of arrangement may not suit everybody, but there are opportunities to house overseas students, university students who have come from the country to the city to study or singles who are happy to share a home. To advertise your spare room, head to Real Estate Share, or for overseas student housing check out Oz Home Stay and Student Housing Australia.
4. Install a vegetable and herb garden. Not only will this save on your food bill because you’re growing your own food, you can sell extras at markets or to family and friends. If you live rurally, set up a front yard vender so passersby can purchase using their spare change. It won’t bring in a lot of money but that spare change can add up over time. You don’t need a big yard to grown your own veggies. We use the side of our house and we have allowed a pumpkin vine grow through our backyard which produced 18 pumpkins all at once. And it only started from a pumpkin seed that was dispersed over our garden from the compost bin.
5. Install solar panels. Unfortunately, you can’t get as much money back when you sell your unused electricity, but you can keep your existing electricity bills down by storing the power you bank up to a battery than can be used for your personal use. Power bills are not getting cheaper so whatever money you save from your electricity, can be added to your mortgage. If you installed panels before the changes were made, that income can be directed to your mortgage. Unfortunately for us, we break even because we have high electricity usage.
6. Install water tanks. Saving water is not going to reduce your water bill by very much, because if you study your bill, a lot of what you’re charged is the service to your property, not the water used. However, every little bit helps. Use tank water for outdoor purposes and washing your car. Grey water can also be used in the garden, but check with your local council on the regulations around grey water. The restrictions are based on environmental hazards, rather than being strict for the sake of it. You can check out my post here on more ways to save water and save money.
If you can do just one of these ventures, you might be surprised how easily you can bring in some cash that can be directed to your mortgage which can potentially save you thousands of dollars in interest. It’s amazing how a little can go so far when paying a mortgage.
Do you have a mortgage? Do you have any tips to share that has helped you pay more off your mortgage? What can you do to your existing property so it can make income?
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