Nearly half of UK households say that they would struggle to cope if their monthly outgoings rose by £99. We look at how you can create some financial 'breathing space' to help you out if you lose your job or become ill.
How to make money from your home
Property is likely to be your single largest asset and there are a variety of ways that it can help to bring in some much-needed income:
Here's five ways to make money from your property:
Easiest - Rent your drive
Live close to a city/town centre or train station and have a parking space sitting empty during the week?
Then you could potentially be making hundreds of pounds a year by renting it out.
Top locations could net you up to £200 a month. There are a number of websites that can put you in touch with people interested in renting your drive - the major ones charge commission but some are free:
Parkatmyhouse - most flexible - 15% commission
YourParkingSpace - free to use but you need to collect the money
ParkLet - long term rentals - 15% commission + VAT + initial £25 + VAT fee
ParkOnMyDrive - free but basic service
Easier - Rent a room
If you have a spare room sitting empty in your main home, you could be renting it out and making up to £4,250 a year tax free.
There are plenty of websites like Spareroom to help you with advice on finding a flat mate, ground rules and contracts etc. There are also sites that will help you find exactly the right type of tenant. So for example if you don't mind having someone staying during the week but want the place to yourself at the weekends then Monday-to-Friday can put you in touch with commuters who are looking for a place to stay during the week.
When I bought my first property I let out two- of the three-bedrooms I was able to cover the entire costs of the mortgage every month. This meant that I was able to pay off extra on the mortgage every month and pay it off entirely within five years.
Do you own a second home that sits idle for most of the year? You could be getting income from it and there are plenty of sites that will help you market and manage the place.
Alternatively if you live somewhere close to an attraction - like Wimbledon, a festival, or the Olympic venues? People will often pay a considerable premium to pay to stay close to a specific location for a short period of time.
Harder - TV / Film location
Would your property be suitable for use as a TV or film location or as a set for a photo shoot? If you own a reasonably large and interesting looking property with good access and parking (think large crews) and get on with your neighbours, then it might be worth checking out and registering with a few location finding companies.
You'll have to be pretty flexible about letting them change things around in your place and good with getting on with people. You could make anything between £500-1,500 a day. Sites like Amazingspace will help.
Harder - Buy-to-Let
It's certainly much harder to make a good return on buy-to-let property now than in the past 20 years, but not impossible. First you'll have to save hard for a deposit (most buy-to-let mortgages require at least a 15% or even 25% deposit).
Then you'll also have to pay for stamp duty, legal fees, surveys, ensuring the property is fit for rental (either unfurnished or furnished) with decent home appliances, kitchens and bathrooms. Despite this there are gains to be made.
The current shortage of rental properties in some areas of the UK mean that rents are rising and, looking at it as a long term investment, there are few alternatives that are as safe. When working out the numbers it's worth considering that even if the rental income only just covers the mortgage cost, it does mean that someone else is effectively buying you that property and that when the mortgage is paid, it will be yours.
However, you do need to ensure that you can cover any periods where you are between tenants and you are able to cover the mortgage if rates go up. Not one to
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