When building a new home, budget is always a consideration. If you’re like most people, there is an upper limit to what you can build with the resources you have available. If you don’t yet have the funds to build your dream home, you can save money by using your existing space to your advantage. Spare room rentals will allow you to save money for a down payment on a construction loan or pay off more of your existing mortgage faster to build more equity.
Temporary Rentals
Renting a room in your home through services like Airbnb or VRBO is a great way to generate income and reduce your own living expenses. The ideal setup is a nicely furnished bedroom with an attached bathroom for maximum privacy for both you and your guests. However, travelers choose all types of room rentals, so as long as you are willing to share your space, you can probably find people who want to rent it.
Creating a listing through these types of services is relatively easy, but the pricing structure is different for each, so do some research to determine which ones are right for you. Cross-posting will increase your chances of keeping the room occupied more frequently, so don’t limit yourself to just one site.
How much can you make through temporary spare room rentals? While it depends on your location and other factors, according to a HomeAway survey, most people (70 percent) are able to cover more than half of their mortgage through renting.
Long-Term Rentals
While short-term rentals can generate more cash per stay, long-term spare room rentals provide a steadier income stream and allow you to predict how much you can save. Long-term rentals don’t necessarily mean you have to have a full-time roommate. Advertise your furnished guest room for frequent business travelers who want a consistent place to stay while they’re in town. They save on hotels while you save for your dream home. Graduate students can also make great long-term renters because they are more mature than college students, and they tend to keep busy schedules.
Keep the Cash Flowing
Once you have started generating income with spare room rentals, it can be challenging to give up the extra cash. The good news is that you don’t have to! Use the money you’re saving to build the type of home that provides the flexibility to offer spare room rentals when you want to. Your savings will provide a larger budget to build a bigger home, but you also have the opportunity to be smart about your floor plan.
For maximum privacy (and maximum rental dollars), consider adding a 512 Suite to your custom home floor plan. With a separate entrance, full bath, kitchenette, and optional washer and dryer, your guests will enjoy all the comforts of home. In addition to the extra income, you’ll also have future flexibility as your family dynamics change.
Another option to consider is a floor plan with dual master suites. Often located on separate floors or at opposite ends of a single-level home, dual master suites allow you to offer luxurious spare room rentals without compromising on your own comfort.
Get Favorable Financing
If you plan to offer spare room rentals, you may be able to get a larger construction loan, especially if you can show a track record of previous success. Renting your existing space will also increase your income, which is a major factor for lenders when deciding how much mortgage you can get. Save money now, and get more favorable financing by earning extra money with your home.
Adair Homes offers many ways to customize each floor plan, so no matter what your future plans are, your home can accommodate them. Call today to talk to a Home Ownership Counselor about your vision, and we’ll work with you to determine exactly what you can get for your budget.
