There are many creative ways to get your home to help bring in extra cash, including creating a separate apartment, taking in a boarder, or renting it out for movie shoots.skynesher
When construction contractor Eric Vogin saw how renovating a client’s home could bring in extra money, he decided to get his own house in order.
“A lot of people are doing garage conversions to bring in some steady income. My wife and I have a 2,400-square-foot house, so we put in a two-bedroom apartment with a walk-out,” says the owner of EV General Contractors in Niagara Falls, Ont.
Adding an extra unit is just one way for Canadians to bring in extra funds to help pay the mortgage and other expenses. Experts say there are plenty of creative ways to get your house to help pay for itself.
Money-making ideas range from long-term plans such as setting up a separate apartment or unlocking the equity in your home, to something as simple as renting out space for a movie shoot or a pool party.
“For some homeowners, it can be as simple as taking in some roommates,” says Trish Bongard Godfrey, an agent at Chestnut Park Real Estate Ltd., in Toronto.
“It’s informal, and you don’t have to worry about things like meeting building and fire code requirements for a separate apartment,” she explains.
The disadvantages, of course, are lack of privacy, the need to set boundaries and house rules, making clear who actually owns the house and who is just chipping in, and the need for an exit strategy in case the roommates or the owners want out.
It can be a lucrative venture. The average rent in July for a two-bedroom apartment in Toronto was $2,257 and $2,500 in Vancouver.
“With rents the way they are, many people are happy to share. If you’re young and a first-time buyer, you might already be used to living with other people anyway,” Ms. Bongard Godfrey says.
There are other ways to get your house to help pay the mortgage, says Tirajeh Mazaheri, founder of Elite Realtors and owner of Coldwell Banker Prestige Realty in Vancouver.
“One way is to rent your house out for photo shoots or movies,” she says. Homeowners can register their properties with an online agency in British Columbia, Toronto or other centres and wait for fame and fortune to arrive.
“In my case, someone just knocked on my door one day and asked if they could rent out my house for a movie, and I said yes,” Ms. Mazaheri says.
The amounts paid by filmmakers can vary, she notes. “It depends on how long they need the location and what they want to do for the shoot.”
People renting out their homes for films or photo shoots should make sure they know whether the photographers and directors want to repaint, refurnish and re-landscape a house, then arrange to have the house put back the way they found it.
Homeowners should also be prepared for surprises. Makers of one short feature shot in Southern Ontario a few years ago startled the neighbours with a llama grazing in the backyard – the llama had a key role in the movie.
“Film and TV productions carry insurance policies that indemnify the property owner. You should receive a copy of the insurance with your location contract,” says Creative BC, the British Columbia agency that helps co-ordinate house bookings.
Another way to unlock value from your home is to take in students as boarders. Many independent schools, community colleges and universities can co-ordinate these arrangements with homeowners, Ms. Mazaheri says.
Homeowners can also operate a business out of their home and save office expenses, she adds. “Some people have full businesses at their homes, but others do something simple like take care of other peoples’ pets for extra money.”
Those who run a home office or business should be aware of the Canada Revenue Agency rules that exempt personal residences from capital gains taxes, but it will hit homeowners with taxes if a large enough portion of the house is used as a workplace. It’s something people should check with their accountant, Ms. Mazaheri says.
Another option is to use the equity in your home to purchase a separate rental property, says Justin Chausse, a mortgage broker with Dominion Lending in St. Catharines, Ont. This usually involves setting up a home equity line of credit with a bank or other financial institution and using the funds available as a down payment on the new property.
“It’s something you would consider as a longer-term investment, not a property to flip,” Mr. Chausse says. “It can work out to your advantage over time if the property you buy goes up in value.”
Another alternative is to leverage the extra space you might have in your home by renting it out for people to store their stuff, says Deb Vukelich, realtor with Royal LePage Realty in Niagara Falls.
“I have clients who rent out their garages for people to put motorcycles or for storage spaces. I even know someone else in the country who rents out part of their barn to board horses,” she says.
For those who want to travel, swapping houses can help save money, though it doesn’t necessarily bring in additional funds.
“It can be a good deal, though,” says Ms. Bongard Godfrey, who is lending her summer home in Nova Scotia to a friend.
“In return, I get her house in Collingwood [Ont.] during ski season.”