If you are on a low income and have no money at all in the bank to draw on, one of the most effective ways of increasing your income with no outlay is simply to share the house you live in. All you need is a house (or a flat, apartment, unit, anything!) that has a spare room. While this technique is most suitable to people who don't have any funds to start out, it may suit others as a long-term means to make extra money. For others again it may be a strategy to earn extra money in the short term, such as to build up a deposit for a rental property or simply to pay off their mortgage faster.
This technique works best if you live somewhere with a high number of single people, such as close to a university or the CBD. If you live in an area with no demand for share accommodation or you live in a house with no spare bedrooms, consider moving somewhere more appropriate. Of course this means you need to share your living space with strangers, so if you are uncomfortable with that, sharing your house is not going to work for you, although there are some exceptions which are discussed below.
Sharing your house can be done in a number of different ways, ranging from straightforward to quite complex and expensive. One thing to remember is the more bathrooms the better if you are sharing your house, so take this into account if you are looking for a house with sharing in mind. If you own your own house and it only has one bathroom, look at adding at least an ensuite so you have the privacy of your own bathroom.
- Sharing your house
The simplest way to earn money from sharing your house is just to find someone to stay in a spare room in your house, and they share both your house and your expenses, which means they pay a portion of all of the household bills like electricity. This is the most straightforward type of sharehouse, and is commonly done by young, single people. At best everyone in the house has an equal or near equal say in how things are done in the house, depending on how much of the common items like cutlery, refrigerator etc they own. The biggest benefit of sharing like this is that the income is not taxable and does not need to be declared to Centrelink, as you are simply splitting your living costs with others.
When the sharing balance becomes inequal it gets more complicated. If you own all the furniture and goods in the house and you are offering an empty room, you will need to be more careful as your insurance won't cover you if the people you share with steal your possessions. Sharing works best for people with fairly low-value possessions, which is part of the reason sharehousing is so popular among students and young people who have yet to accumulate expensive possessions. Again, if you are not comfortable with this kind of situation, you don't have to do it.
Boarders are different to housemates that you share with. Boarders are paying board which is generally more than just a fraction of your expenses. Board typically includes an allowance for the household bills, and can also include a payment for services such as cleaning, meals and even laundry. When you provide a service like this it becomes taxable income and must be declared to Centrelink.
However, offering full board can be very lucrative. It attracts a slightly different market than a plain sharehouse, being most attractive to higher income students and divorced men - basically a demographic that might still expect to be looked after. If you are willing to invite strangers into your home and look after them for a fee, offering board may be for you. It is most appropriate if you are an older, single woman living in a large house by yourself. You may find that if you take on older male boarders that they will be more than just lodgers and will help with odd jobs around the house too.
- Splitting up your house into sections
If you own your own house, and it is one of those large, older style houses back when rooms were large and walls were made of stone (or at the very least, double brick) you may find you are able to physically divide the house up into separate units. This is by far the most expensive option, but will leave you with an autonomous lifestyle and is most suited to people who want to keep their independence and not open their house to strangers, and most suited to people who live in a reasonably inner city area - which of course is generally where older style houses are located.
You will need to seek planning approval to divide your house up into units or apartments. You will need to make sure each apartment has its own kitchen, bathroom and yard and most importantly, a firewall separating each apartment. It is a good idea to also make sure each apartment has its own car parking space and electricity meter. Once the conversion is complete, you will be able to rent separate parts of your house out at the standard market rent for a unit in your area.
This particular course of action will require considerable expense and it is best to engage a building company to draw up the plans, submit them to council on your behalf and complete the work. A potentially cheaper option if you have the space would be to build a granny flat for yourself, and rent the house out in one piece.
Continue reading to renovating as a means to make money from property.