I had a look at an open home yesterday. I am not in a position where I can buy here yet, but my mind was buzzing after looking. I had gone for my walk and happened upon it, so decided to check it out. It looked fantastic from the front and inside was even better.
It was way out of the price range I would consider, but it had so much earning potential. By earning potential I don’t just mean renting it out. It would be a home we live in, but it could have been so much more.
It was a 5 bedroom home, with a double garage, large block and a swimming pool. It also had a bedsitter type unit downstairs, with its own entrance, toilet, kitchenette, bed area and lounge area, plus it had a side access, so it would be easy for someone to come and go without disturbing anyone. You could also section off the part of the garden near their door, so they would completely have their own space.
So the first earning potential was the unit.
The next earning potential was the master bedroom. It had an ensuite, was right near the front door, which had a lounge room near it. This could be rented out to a boarder, who would only need the kitchen for making their meals, etc... but since they would have their own lounge and bathroom, they would still have a lot of privacy.
You see, all the other bedrooms were located at the other end of the house, with another exit/entrance, another bathroom and lounge/dining area. So we could live in that section and rent the front section out OR just have exchange students stay in one of the other bedrooms and we have the main. Either way, there is earning potential number 2.
Number 3 is the pool. I am not a qualified fitness instructor, but if I was, I would run water aerobics classes in my pool. Have groups of 5, maybe 2 -3 a week; charge $30 - $40 each person for 1 hour, means $150 - $200 and hour. They get more personalised training and my pool gets used. But, since I am not trained, I could actually rent that to someone who is, charge them say, $30 for the use of the pool, they would still get $120 - $170 per hour and I would get money for nothing.
Potential earning number 4 was the big backyard. The options for this were endless, pet sitting, having bee’s and chickens, growing my fruit and veg and selling excess just to name a few.
Number 5 would initially cost a little to set up, but the long term gain would be worth it. Turn one of the garages into a salon. Obviously this would not suit everyone, but because I am qualified, it would work great for me. If I did a fitness instructor course, I could offer complete make-over packages, all from my house! (using my pool and salon). The costs for converting a garage vary but are generally upwards of $20,000.
Number 6 rent out the other garage for storage. Since storage places can be quite expensive, this would be quite appealing for many, one would assume. A few years ago we paid over $200 a month for a single garage size storage unit; I don’t even know how much they cost now days. But I assume more than that! Even if we only charge $40 - $50 a week, it is still cheaper than a storage facility.
Last but not least is potential number 7. The driveway was long, and wide, so you could easily store some ones boat or caravan. Actually, you could drive it up the driveway and sit it on the grass to one side. Again, this would save someone money, as we would charge less than a storage facility, since it would be out in the open, $30 a week would be fine.
After looking at all these options, which probably sound crazy to some, when you add them all up, it works out to be a fair amount of money.
The unit - $170 - $200 (in our area anyways)
The exchange student $200 per week approx, and we could actually have 3 in that house.
The pool sessions - $450 - $600 if I did a course or $60 - $90 if I rented it
Selling excess would take a while to set up, but pet sitting is $6 a day I believe or $42 a week
A salon, hard to judge, and since it would only apply to me, I will leave it off my total (although I will let you know it would be easy to get $700 - $1000 without trying too hard)
Garage - $40 - $50
Space for a boat or caravan - $30
Total minimum $542, max, without salon, but by doing a fitness course $1522 a WEEK!
Now I worked out that on a 100% loan, repayments would be about $1000 a week, that is with rates 2% higher than they currently are. So in actual fact, I would be making money, not just subsidising the mortgage.
I realise these sort of options aren’t for everyone and banks do not do 100% loans anymore and they wont take these sort of things into consideration when you are borrowing from them, but it might make you look at your own house in a new light!
And just so you know, whilst this is a good argument for buying this house, I am still not in a position to do so, yet!