How To Use Your Primary Residence To Grow Wealth
Tuesday Sep 28th, 2021
Owning a home is one of the most financially beneficial investments you can and will make throughout your life. Not only that, but sometimes there is additional cash to be found within our homes (no, not physically unfortunately) than we might think. As homes become increasingly less affordable for people, the opportunity to use your primary residence as an additional revenue stream, which can help offset expenses or pad that vacation fund (Bahamas, anyone?) is something that not everyone knows is possible. Well, SURPRISE! It is indeed. Let me tell you how.
There are three major strategies that we’ll be going through today: buy and hold, flipping your home, and using additional space such as your basement and backyard as cash flow. Before we do that, it’s important to note that if you have not yet purchased a home and want to take the concept of using your primary residence to grow wealth into consideration, that there are a few key things to keep in mind when house shopping. The following are property features that will benefit you in this endeavour:
- Finished Basement
- Additional Dwelling Unit
- Homes with Multiple Bedrooms (or the potential to convert rooms into bedrooms)
- Convenient Location (<span class="ContextualSpellingAndGrammarError SCXW191890265 BCX0" style="margin: 0px; padding: 0px; user-select: text; -webkit-user-drag: none; -webkit-tap-highlight-color: transparent; background-repeat: repeat-x; background-position: left bottom; background-image: url(" data:image="" gif;base64,r0lgodlhbqaeapedaabvzdnvzdnv="" waaach5bauaaamalaaaaaafaaqaaaiinc2qchykqgeaow="=");" border-bottom:="" 1px="" solid="" transparent;"="">i.e. close to transportation)
Investing in a primary residence with one or more of these boxes ticked will make it worlds easier should you decide to venture down the road of ‘buy and hold’ with your property. Speaking of which, what does that mean!?
Buy & Hold
The concept of buy and hold real estate is simply purchasing a home as an investment that you intend to hold on to for a significant period of time. While you will most likely sell down the road, in the interim you can rent it out, which will aid in the offsetting of expenses. Buy and hold is a very common strategy used in real estate simply because of the long-term benefit when it comes to consistent monthly cash flow. The income made from renting your home is not the only benefit. Your property value (especially if you’ve made some renovations) will increase over time, meaning you’ll be in a prime position to make a profit when you are ready to sell down the line.
Flipping Your Home
Flipping a home is another form of real estate investment used to make a profit. If the market is in favour of the seller (which it has been in the GTA for quite some time now), then if you have the resources to buy and flip a home, this is a great way to make a profit. Especially if you’re not currently enticed by the idea of holding onto a property for a potentially significant amount of time, or if you don’t want to be a landlord. Earlier this year I posted a blog all about flipping houses for profit. You can read that blog here for some additional information!
Utilizing Additional Space
There are more ways than one that your primary residence can be utilized in the name of added cash flow. If renting to a stranger within your home is not something that necessarily appeals to you, a few alternatives include using extra space as a storage space rental, taking advantage of your backyard, and becoming a market gardener, or holding events on your property. If you’re exploring the route of opening the unused space in your home up to those who need extra storage, this can be a low maintenance way to bring in some extra cash without having additional bodies constantly in and out of your home. If you have space within your basement that you’re not using or extra room in your garage or shed, there are several opportunities for individuals looking to store both small and larger items in more convenient locations than community storage rentals.
The idea of becoming a market gardener is one that doesn’t necessarily require a farm or a massive amount of space. A standard suburban lot can oftentimes be enough to accommodate the growth of enough produce or greenery to make a nice profit. Because the desire for organic eating is only increasing, there are several opportunities whether on your own or through your community where you could sell your homegrown produce to grateful customers who are specifically looking to know exactly where their food has come from.
Lastly, should you have an abundance of outdoor space on your property, you could make a significant amount of additional cash by renting out your property for events such as weddings, anniversaries, or even concerts or cultural events within your community. For these purposes, always make sure to check what your neighbourhood guidelines on commercial events are just to make yourself aware of any restrictions or ensure you have the proper permits. But for private events such as birthdays etc., if you have the picturesque space to share, there will be certainly be those who will want to take advantage of it!
The bottom line today is that there are a number of ways to benefit financially from your primary residence that you may not yet have taken advantage of. If you’re looking to invest in a property and are interested in having a deeper conversation about buy and hold, flipping your home, or anything related to your purchase, get in touch with me, Myka, today! I’ll be more than happy to answer any questions you might have. You can call me at 905-977-8358 or end me an email through my website.