With rising interest rates and the cost-of-living crisis highlighting the importance of financial stability for Brits, it comes as no surprise to see them searching for ways to supplement their salaries. A study from IW Capital shows that 29% of Brits are planning to earn money through passive income sources in the next year as they search for options to diversify their income. Homeownership represents a great financial opportunity with 1-in-3 property owners who seek to monetise their home making on average more than £500 a month. David Hannah, Group Chairman of Cornerstone Tax discusses 5 easy ways to make passive income through your property:
1: AirBnB
“The first option is to let out some unused space on AirBnB – this is a great way of earning casual income if you don’t mind letting strangers into your property. By taking the necessary steps needed to make a part of your home Airbnb ready, property owners have the chance to create a significant new revenue stream averaging at £6,000 a year. This amounts to the equivalent of two months paid salary for the median UK household, and UK hosts on Airbnb collectively earned more than £1.5 billion last year. Of course, your home will need to be in an area where people want to visit. But, if you’re in an area of touristic interest, then this is probably an interesting option for you.”
2: Semi-permanent renting
“The second option would be to rent a room out on a semi-permanent basis i.e. get a lodger. Research from insurance company London Victoria found that the share of homeowners taking in a lodger has nearly doubled in the last five years. If you do this, you can earn up to £7,000 a year, tax-free, and unlike AirBnB you have the chance to interview your potential lodger – allowing you to get a chance to get a feel for the kind of person that’s going to be occupying your property.”
3: Renting our unused space
“The third option is to rent out unused space on your property for storage. Recent research from Stashbee shows that 36% of Brits have excess space in their property that has the potential to be rented, but are not willing to share their house with someone else there all the time. A driveway or your car parking space has the potential to be rented out if you’re not using it. There are great websites that will act as an agency to rent out your car parking space by the hour or by the day – bringing in a little bit of extra income. Similarly, if you live in a larger property with garaging or other outbuildings, you may be able to rent those out locally to somebody who wants a bit of short-term storage. You may even have a large unused workshop or barn that you can let to a small business bringing in a bit of extra income.”
4: Grow your own
“The rest of the options are more about saving money, rather than generating income. But, in these difficult times, we all have to find ways of making ends meet and the next choice would be to ‘grow your own’ fruit and vegetables. A recent study from Linda McCartney Foods showed that more than half of Brits are growing their own fruit and vegetables at home and 70% of adults want to grow even more produce but are unable to because of lack of space. However, you can grow some fruit and vegetables in a small part of your garden, with home growers enjoying an average of three meals a week containing produce they’ve cultivated themselves – thus saving on your grocery bill. This gives you an opportunity to save money and improve your income.”
5: Stamp Duty
“The last suggestion is that, as a stamp duty specialist myself, you should check whether you have paid the right stamp duty on all of your recent property purchases. You may be a buy-to-let investor who buys regularly or you may only have paid stamp duty on the house you lived in. But, we found that at least one in five stamp duty payments are actually overpayments and we’ve been able to reclaim over 15 million pounds in refunds over the last 18 months. This could be a valuable addition to your savings at a time when your cash flow is under pressure.”
