Between coming up with down payments and applying for home loans, many first-time homebuyers may feel intimidated by the financial commitment that comes with purchasing property. So, if you or your clients are feeling the first-home jitters, you’re not alone. In fact, to help offset the financial burden, many young and first-time homebuyers are looking into converting extra space into a new source of income.
According to a recent survey by Realtor.com, a whopping 49% of American homeowners are open to renting out extra space in their homes. Those numbers are even more staggering when it comes to young and first-time homebuyers, with 67% of millennials and 57% of Gen Z owners reporting their willingness to share extra space that had its own entrance, kitchen and bathroom with renters. Homeowners also reported getting more creative with their shared areas, renting outdoor space, garages and even parking spots to create new income streams.
With the growing prevalence of a “sharing economy” where short-term peer-to-peer shared resources are common — think Uber, Lyft and Airbnb — it’s not surprising that more young and first-time homebuyers’ attitudes are shifting toward a willingness to rent out extra space. That might look like larger outdoor areas, swimming pools, guest houses, studio apartments, carports, side entrances or a whole host of other amenities, depending on your personal goals. So, whether you’re looking for a long-term tenant or just want to make some extra cash while you’re on vacation, we’ve compiled a list of tips for first-time homebuyers who are searching for the perfect house with a little extra space to turn into a new source of income.
Check Area Regulations
Take time to look into the tenant rights and community regulations for the area you’re buying a home in. Some areas have strict requirements regarding rentals and in recent years many major cities, including New York City, San Francisco, Chicago and Boston, have cracked down on short-term rental sites.
Identify Opportunities to Upgrade
So you found your dream home, but it doesn’t have a separate entrance for guests? Or, you found a place with a studio apartment, but it’s a bit worse for the wear? Those may not be deal-breakers. Keep an eye out for the opportunity to upgrade and wrap those costs into your budget. Though it might seem daunting at first, making the investment could pay off in a big way if it brings you better tenants and rental opportunities.
Clear Away the Clutter
Don’t let dead weight in the form of mismatched furniture, worn-out clothing or unnecessary paperwork drag you down. By getting rid of clutter and investing in space-saving organizational tools, you’ll have more room to work with and more free space to convert into income. Plus, your inner Marie Kondo will thank you.
There are many ways for homebuyers to turn extra space — both indoors and outdoors — into income. So, don’t be afraid to get creative, do a little research and explore the options that are best fit for you. And if you want to see more residential real estate information and resources, check out the MVS blog and join our mailing list for more.