Does your home put money in your pocket or does it take money out? If your paying a mortgage, your home is earning you a long term investment of equity and appreciation! That’s how your house acts as an asset. But what about the here and now? Can your home provide you with short term cash flow?! The answer is yes it can! Keep reading to learn how.
What’s up with that you say? You’ve got tons of extra space in that spare bedroom, garage or basement that you’re already heating, cooling and paying taxes on. And don’t forget that idle front yard and backyard. Why not make the old homestead earn its keep?
There is more that your home can do for you. Here are some ways:
#1: HOME OFFICE DEDUCTION – The home office deduction is one of the most misunderstood tax loopholes. There are three rules to get this deduction:
· You must have a business.
· You must have a space in your home that is used exclusively for the business.
· You must regularly do some kind of business activity in that space.
If you receive a Form 1099 as an independent contractor, you have a business. If you have a part-time activity in which you make money (or in which you plan to someday make money), you have a business. Face it; if you’re spending your time working, even if it’s part-time as a Arbonne representative, you have a business.
The home office deduction is calculated as a percentage of the business square footage of your home applied to the total square footage, and a simple way your home can make you money. In other words, if your home office is 200 square feet and your home is 2000 square feet in total, then 10 percent (200 divided by 2000) of your home expenses are deductible against your business income.
#2: MOVE – If you live in your home for two of the previous five years, you can take a capital gain exclusion of up to $500,000 if you’re married, filing jointly and $250,000 if you’re single.
Chances are you’ve heard that strategy before, but had you ever thought about making it your career? Now if you have a family and want to settle down, this may not fit your lifestyle. But, if you don’t mind moving and are pretty savvy with the market or know a realtor who is, you can make some clever decisions for a quicker ROI, return on investment.
#3: VRBO / AIR BnB – Do you have extra unused living space that could make you an extra income? Asheville is a destination city. Take advantage of that opportunity to bring in some extra cash flow.
Before you jump right in, make sure to do your research. Make sure you aren’t breaking any rules or laws, and learn how to prepare your home for your guest. Your home can make you money once again, just by following these guidelines:
· Commitment to Reservations – When you confirm you’ll host someone, they’re trusting you to take care of their needs. Whether it’s a family vacation or a business trip, an unexpected change in accommodations can be very disruptive.
· Communication – Every time a guest reaches out—whether you have a reservation with them or not—responding quickly shows that you’re an attentive and considerate host.
· Accuracy – We hear from hosts and guests that sharing clear expectations before a trip can contribute to a better experience for everyone. As a host, you can help travelers decide if your space is a good fit for their needs by providing detailed information about what your listing has to offer.
You can also join a forum and chat with other people who already do it. Lastly, always research and choose the site you want to advertise on, and talk to a real estate professional for advice.