Our homes are among the most valuable assets we own. Many of us take decades to own the buildings we inhabit outright. You can get a significant return on this investment if you use the right techniques. Let’s look at some of the more popular and effective methods for cashing in on your home and make money from your property.

 

Renting out a Room

If you’ve got space to spare in your property, then you can let it out to a paid-for houseguest. You’ll need to vet your would-be tenant thoroughly and afford them all of the appropriate legal rights. You might also consider renting a cheaper property yourself, and then pocketing the difference between your earnings and your outgoings – just be sure that you’ve accounted for all of the running costs when you come to make this decision.

Downsizing

Another option if you’re not using the entirety of your property is to move to a smaller one, and keep the difference. This is a popular choice for parents whose children have just moved out. You don’t need to work out what to do with the vacant rooms – you might simply downsize and use the profits to fund a lavish retirement, instead.

Equity Release

For over-55s, equity release is perhaps the simplest way to generate cash from a property. You’ll simply borrow money using your property as collateral. This will give you extra cash to spend without going through the hassle of a sales or rental process. If you’re older than 55, then you have access to an equity release mortgage.

After you’ve paid off the mortgage on your home, then you own it outright – which is another way of saying that you have 100% equity. You won’t benefit from this, however, as the extra value that your home accrues because of surging house price won’t actually be of benefit to you until you come to realise the asset – which, if you intend to never sell the house, means that you’ll never enjoy that cash – until you decide to release equity.

Unlike traditional mortgages, which are settled incrementally over time via monthly repayments, an equity-release mortgage is only settled after you leave the home. It’s therefore worth drawing a clear line between re-mortgaging and releasing equity.

Renovations

If you’re willing to carry out renovations yourself, then you might be able to add significant value to your home, and then move it on for a profit. There are certain types of renovation which will reliably increase the value of a home. These include kitchen facelifts, loft conversions, and rear-property extensions. Make sure that you account for the cost of renovation, and leave a generous margin for any unforeseen difficulties.