Having a second home can either be an opportunity or a liability. If you are lucky enough to acquire another property, there are some ways to make money out of it.
Properties cost us money. From property taxes to mortgage payments, our home can gobble up a big part of our income for decades. If you have a second home, the expenses can be even bigger. However, there are several ways to make your second property generate a substantial income.
1. Rent out your vacation home
A vacation rental property exchange can help you make the most out of your investment, but it comes with a few conditions. A vacation home is still considered a second property and therefore cannot be qualified for a 1031 exchange. However, if you rent out your second home for more than 15 days a year, you are qualified for anexchangeunder Section 1031. Fortunately, apps like Airbnb and Booking make it easy for homeowners to find potential guests for their rentals.
2. Start a BNB
Have you ever dreamed of running your ownbed and breakfast? If so, your second property can become a real money-maker if it’s situated in the right location. See if the property has the potential to attract visitors and if you have enough capital to make the home more presentable. Once you’ve done the feasibility study, you can look into how to start and operate a BNB under your local laws.
3. Use it as a venue
If your property has the potential to hold events such as weddings or parties, you can have it listed as a possible venue on different apps. Properties such as barns, farms, and colonial houses are popular amongst people who are a fan of vintage and rustic events.
4. Turn it into a dormitory
Is your house near a local college or university? If that’s the case, then you may just be sitting on a goldmine. Turning your second home into a dormitory requires only a little renovation to make it suitable for multiple residents (such as adding another bathroom or adding storage space in the bedrooms), and you won’t find a shortage of young adults looking for a place to rent. However, renting out to young people always holds some risk, so make sure your house has insurance before leasing.
5. Rent it for storage
Don’t want to rent out to tenants but still want to make some money off your second home? Why not rent it out for storage space? Many people have items that they don’t have space for in their own homes. Instead of renting out a storage unit, you may want to store it in your home for easier access and perhaps cheaper rates.
A second property has the potential to bring in more income for you, which you can use to pay off your current mortgage or to invest in another property. Whichever the case, turning your property into a money-making space is a way to maximize your investment.