How to Make Homeownership a Side Business
Is the rising cost of almost everything making your dream of owning your own home seem less attainable these days? According to Bankrate, many people are seeking additional income through side hustles, possibly to cope with those increasing expenses and save for a home. This trend is particularly popular with younger individuals who may be dealing with student loan debt (see graph below):
Here are two strategies for not only making homeownership more affordable in the short term, but also turning it into a profitable side hustle that will pay off in the long run.
Transforming the Challenge of a Fixer-Upper into an Opportunity
Consider purchasing a fixer-upper to assist you in breaking into homeownership. That is a home that may be less appealing and, as a result, has been on the market for a longer period of time than usual. According to a recent article from U.S. News:
“The current state of the housing market may have you expanding your options to try to find a home that you can afford. A fixer-upper that needs some updating and a little love can feel like a welcome alternative to move-in ready houses that go off the market before you can even take a tour.”
You may reap two significant benefits by choosing a home that requires some work. For starters, because you are not looking for the perfect home, you might find it easier to find one. It may also assist you in entering the housing market at a lower price point. This strategy allows you to become a homeowner at a lower cost while also having the potential for future profits.
Yes, the house may require some elbow grease, but putting time and effort into gradually improving your home not only turns it into a home, but it also increases its future market value.
So, while you enjoy the satisfaction of transforming a house into a home, you are also accumulating equity that can be released when the time comes to sell.
Renting Out a Portion of Your Home To Make It More Affordable
Another smart strategy is to buy a house with the intention of renting out a portion of it right away. According to a recent press release from Zillow, renting out a part of their home is already very important for most young homebuyers (see graph below):
This approach serves a strong purpose. As Manny Garcia, Senior Population Scientist at Zillow, says:
“For those first-time buyers navigating the ‘side hustle culture,’ where a regular 9-to-5 might not quite cut it for homeownership dreams, rental income can step in to help . . .”
Basically, it can help you afford your monthly mortgage payments. So if you’re open to it, renting out a portion of your home not only helps with affordability, but it also positions you as an investor and turns your home into a source of income.
In the face of today’s affordability challenges, both of these strategies offer more attainable paths to homeownership, especially for younger buyers. If you want to discuss these options and see how they might play out for you in our local market, let’s connect.