How Your Home Can Generate Income
During the first quarter of 2019, Americans collectively held almost 9.2 trillion dollars in mortgage debt. That translates to an average national mortgage debt of just over $200,000. With the average national salary hovering just under $50,000, it is safe to say that many people are perhaps living beyond their means.
If this situation resembles your financial state, you don't have to settle for staying in a rental property until your economic position improves. With a little bit of planning and ingenuity, homeowners can turn their property into a substantial investment that generates income from day one. Sustainable homes, especially, offer a unique opportunity to generate income that can help to offset your monthly mortgage payment.
Sustainable homes often get the bad reputation of being prohibitively expensive, and Rise has written extensively to shed light on this topic. However, they can hold numerous opportunities to allow homeowners to make money from the homes and the land itself. Below, we take an in-depth look at several ways that sustainable homes can produce income for their owners.
Adding a Rental Suite
With an average square footage of almost 2,700 square feet, homes today are big - often unnecessarily so. A family of three or four people will most likely seldom use the second dining room, basement play area, or other "extra" spaces that are so often part of home design. Contractors often want to maximize the square footage of the homes they build to make more of a profit. While the tiny and small house movement is gaining steam with younger generations across the country, homeowners today are much more likely to find homes with much more space than they need.
If you are building a new home, perhaps you don't need the whole square footage that your contractor recommends or the local homeowner's association demands. If this is the case, consider turning a bit of that extra space into a rental suite. Renting a room in your home can bring in anywhere between $350 and $500 a month. You can increase the price if you include all utilities, cable and internet, and other amenities.
If your home has a large, separate garage, it might even be possible to add an upstairs suite above the parked cars with a private entrance. With a small private bath, you could charge upwards of $600, depending on your area.
As with all homes, you can market the sustainability features of the rooms you rent in your home to private renters for an added premium rental cost. For example, you might mention that the rooms you rent are VOC-free, are powered by renewable energy, or are built to energy-efficient standards (like Passive House or Net-Zero, etc.). All residents will share the associated health, environmental, and financial benefits.
Renting Parking and Storage Space in your Garage
If you don't like the idea of sharing your home with strangers, you can still make money by renting out the extra space in your home and garage. Imagine a one-car family that purchased a large home with a separate three-car garage. A couple of days of DIY remodeling work could turn that extra-large garage into 2-3 small self-storage sheds that could be rented out to other families in the community. If you live in a college town, students are always looking for places to store their stuff, especially during vacations and semesters off.
In fact, there is even an online peer-to-peer community called Spacer that helps people find renters for both parking spaces and self-storage areas in their garage. As our urban areas continue to become denser, renting out either parking or storage space might become a hot commodity.
Starting a Bed and Breakfast
The rise of Airbnb has led to astronomical growth in people's ability to lease or rent short-term lodging since it was founded in 2008. From three million guests using the service in 2012, today, an estimated 100 million guests are using the service each year. With over 3 million listings on Airbnb, they have more units available than the top three hotel chains' combined total.
One of Airbnb's nice aspects is that it allows people to market their home and property to like-minded vacationers and visitors. For example, there is a niche market for people renting out the tiny home on wheels that they have parked in their driveway. In addition, if your home is net-zero energy or built with some sort of unique natural construction method, you can find tourists and visitors willing to spend a little bit more to experience sustainable living firsthand.
In 2014, there were well over 8,000 registered farmer's markets in the United States, up from 1,755 in 1994. As sustainability and health-conscious citizens move away from the industrialized food system, many are increasingly willing to pay a premium for organic, locally-produced food.
A sustainably designed home on even a small piece of property could turn a sterile green lawn into a thriving system of raised vegetable beds and small fruit trees that can produce enormous amounts of organic, wholesome food to sell at your local farmer's market. Home composting techniques, rainwater catchment irrigation systems, and even greywater recycling designs can all be geared towards an organic gardening project that can add income to the home.
Selling Excess Renewable Energy
You might be able to make a little bit of income by selling excess renewable energy that you produce back to your local utility. Sustainable homes designed with maximum energy efficiency in mind will most likely drastically reduce their energy requirements. If your home incorporates passive solar design and passive house thermal efficiency, you might see a substantial decrease in your monthly electricity needs.
If your home has a sizeable solar panel system installed on the roof, the excess energy you produce might be sold back to the utility company. Unfortunately, utility companies will only pay you the estimated cost to generate the power and not the end-user mark-up that appears on your utility bill. For example, if you are paying $0.12 per kWh, your utility company might only pay your $0.04 per kWh for selling back to the grid.
Nonetheless, by cutting back on the amount of energy your home uses through efficiency measures, you might receive a sizeable check each month from your utility company. This income will help you pay back your solar panels' initial, upfront cost and sustainably designed home.
For example, perhaps you have a 5 kW solar panel producing around 1,000 kWh each month. But - your household is only using 400 kWh on average. In this example, you could expect a monthly check for around $30 each month if the utility company were to pay you $0.05 per kWh of energy fed back into the grid. The Database of State Incentives for Renewables & Efficiency is a great resource to help you stay on top of state and national laws that affect buying and selling of energy.
With a bit of creativity and initiative, sustainable homeowners should find ways to use their homes and their property to generate income every day.Disclaimer: This article does not constitute a product endorsement however Rise does reserve the right to recommend relevant products based on the articles content to provide a more comprehensive experience for the reader.Last Modified: 2021-07-21T12:42:17+0000