How would you like to save yourself some money (& stress) by paying off your home sooner? Whether you’re sick of renting someone else’s place (& paying off their mortgage) or tired of stressing about making mortgage repayments, the key to your future could be as simple as renting out a room.
The concept of renting out your spare room has been around for thousands of years. Here in Australia, a lot of the immigrants that arrived in the 1950’s and 1960’s bought their first home and would rent out the spare bedrooms. This fixed rental income helped them pay off their mortgages in less than half the life of the loan and save on interest payments. This clever method of paying off your house continues to be very popular amongst newcomers.
But far from just being a great idea for immigrants, this concept can also help many Australians own their first home. From first home buyers to those struggling with mortgage repayments, renting out a room can help you get ahead financially and set yourself up for life. Whether you’re sick and tired of renting
Imagine having a mortgage of $500K on a 30 year term at an interest rate of 4.25% – your monthly repayments would be approx. $2443.00. Now imagine you live in a typical 3 bedroom suburban home where you can rent out both spare bedrooms for $150/ week each.
By paying an extra $300 per week you can slash nearly 16 years off your mortgage and save over $200k in interest!
Although there are other factors to consider, like the extra income you receive and how it will affect your tax situation, most Australian’s would benefit by renting out a room or two. We recommend speaking with your financial advisor or accountant as they will be able to advise you which way is best.
What if you don’t have a room to spare? You could consider converting that additional living room or garage into a spare bedroom. Depending on how much land you have, you could even put a cheap granny flat in your backyard (STCA) and rent it out. Even when you take into account the cost of conversion or a kit granny flat, many have saved not only thousands of dollars in interest, but also managed to keep their homes when times are tough.
#realestatetube is an ideal place to help you find and screen potential housemates. By seeing a video of the applicant prior, you get a feel for their character and personality. Or on the flip side realestatetube can also help rent out your spare room. And the best part is it’s 100% Free!
Disclaimer: Real Estate Tube makes no representations to the above blog or accepts any responsibility as to the accurateness of the above information. Both tenants and Landlords should seek their own independent advice and not rely on the above information.