Owning a house is expensive business, almost no one will dispute the fact. From having to cover your monthly loan installments, to paying for repairs and even property taxes, the financial responsibilities of being a homeowner are expected.
Are there ways for you to recoup some of these costs and earn cash off your house? There certainly are! Here are six ideas to help you get money off your property:
1. Rent Out Planting Space
Space is scarce and green space is even scarcer! If you have a garden area or fresh soil plot in your home, you could use the space to generate extra income. Local nurseries, plant shops and even private gardening enthusiasts often require storage or planting spaces for their greens. You can offer your garden to grow vegetables, flowers and greenery to earn a small rental on the side.
The exact earning potential is unclear as yet since this type of home-business is relatively new to Malaysia and Singapore, where small plots of land can be rented from as little as RM177 per 2.5sqm per year up to RM1,500 for 700sqm per month.
Note that to do this, you may need to provide access to the planters to visit your garden from time to time to check on the plants or fertilise and take them for planting. You may also be asked to water the plants or move them from direct sunlight. If you can handle the work and accommodate such requests, this might be an easy way for you to make money off the space.
2. Rent Out A Room
Renting out a room in your home is increasingly popular and easy to do these days thanks to apps like Airbnb, Hostel Hunting and Homestay. Best of all, there’s not much you’ll need to do – only prepare a room with basic amenities and depending on the hosting site, provide breakfast. You can also opt to post on PropSocial to find tenants for a short-term rental.
Unlike conventionally renting out a room to a tenant for a 6-month to one-year lease (or more), these short-term rentals come with a lot less commitment.
If you don’t want to host anyone and would like your home all to yourself again, just block out the dates or take down the listing.
In addition, there’s potential to make even more money than with a tenancy. The day rate according to Airbnb averages RM119 per night, per private room in Kuala Lumpur. Of course, the ‘nicer’ you make up the room, the more you can charge.
3. Refinance Your Home
If you’ve owned your home for a few years and the property has increased in value, you can draw the excess out through refinancing. In other instances, paying off a significant amount of your initial loan, where your house is now worth more than the balance of the loan, could enable a refinance as well.
For instance, if your home is now worth RM400,000 and your outstanding balance is RM150,000; your home is valued at an amount greater than what you owe.
If you refinance the property, you’ll be able to withdraw some (or all) of that excess as a whole new loan. However, do note that under Bank Negara Malaysia guidelines, the max tenure for your refinance is 10 years. Thus, there will be limitations on how much you can borrow, which depends on your repayment affordability among other factors.
With a shorter tenure, monthly instalments will be higher. However, interest rates for refinancing are much lower than a personal loan. So if you need money to fund a business opportunity, buy a new property or pay for your kids’ education; a refinance is likely cheaper than a personal loan.
4. Hold A Garage Sale
Most homes gather a ton of unwanted stuff over the years and often, your treasures just sit there taking up space. By hosting a garage sale at home, you can offload your old furniture, appliances, books and clothes over a single weekend for a tidy profit.
Invite neighbours, friends, and relatives to come to your garage sale. You can also post an ad to target vintage lovers or shoppers keen on preloved goods to visit your sale. Posting on social media pages or an online marketplace is usually free and easy to do.
5. Pet Sitting
If you are good with animals and maybe even have a few of your own, you might want to consider using your home as a boarding space for pets.
When pet owners go on holiday, they often send their little animal friends to pet hotels or boarders, many of which are at-home sitters. You can charge a per diem fee and make a decent amount of money from having pets stay with you. Boarding rates range from RM30 to RM60 or more per day, depending on if you are providing extra services like grooming and dog walking.
Nevertheless, Pet sitting is NOT for everyone. You will have to take care of these pets for the duration; this means feeding and cleaning up after them. If you are not an animal-person, don’t attempt it.
You’ll also need to clearly communicate your services and what you are (and aren’t) responsible for. Pet Nanny conveys their house rules on their website that cover assumptions of risk, cancellation policies, vaccination, admission refusal and procedures in case of emergencies.
Also, this idea works better if you live alone or with fellow animal lovers. As you can imagine, a house filled with pets might not be a comfortable living arrangement to all at home. You will also need to consider your neighbours as well, it’s best to ask for permission first as pet hosting can get noisy. Moreover, high-rise properties may not be apt for pet-sitting in terms of residential rules as well as managing the basic needs of a pet i.e. exercise, grooming and to relieve themselves.
6. Rent Storage Space
When individuals and businesses are in between relocating or downsizing their spaces, they often require storage areas for documents, furniture and other belongings.
While not common in Malaysia, the idea is similar to Storemates, where one can keep their belongings with a neighbour or nearby ‘storemate’ for less than a storage company would charge.
If possible, only offer up the space to people that you know and trust like friends, relatives, neighbours and colleagues but if there are no takers, a second option would be to simply post an ad on sites like Mudah or Craigslist.
In these situations, it’s a good idea to draft a contract letter and get it endorsed. You might want to have a lawyer to go over your contract, which will cost a bit of money at first, but once you’ve a standard agreement that you are happy with, you can use it again for other storage renters.
Also, be sure to set ground rules on what kinds of item you would not want on your premises and how you will dispose of the items if they are not collected within a certain amount of time.
Do take in consideration that if you are staying in a gated and guarded residence, or a high-rise building, exit and entry could be troublesome for your potential clients.
Don’t Forget About Taxes
If your plan to make money from your home is not merely a one-off thing but a regular activity, like the Airbnb idea for example, it’s a smart move to register it as a business or declare your earnings. Whenever you receive money for a service you provide, the act could be considered a ‘business activity’ and thus, not registering could see you fined, imprisoned or both. If you are unsure about your tax position, do reach out directly to the Inland Revenue Board of Malaysia for advice on your specific situation.
On the plus side, if you do register a business and file for taxes, you might be able to write-off business expenses and claim reliefs. When you want to apply for a loan, having a registered business and extra income will look much better on your application and possibly even earn you more attractive interest rates.
Now you know that there is a way to make money off your home, perhaps you can start browsing for your ideal home at PropSocial!
(Written by: Desiree Nair, 4th Oct 2017)
