Thinking of renting out your home, or another property you own, to get an income? Here are 4 options to consider:
- Rent out your whole home for part of the year.
- Rent out your basement or a room for all or part of year.
- Turn your home into a duplex and rent out 1 floor as an apartment.
- Rent out a family cottage or other vacation home for part of the year.
3 advantages of renting out your home
Brings in cash – Invest the rental income, buy an annuity to create monthly income or use it to cover expenses.
- Allows you to build equity – Increase the amount you own in an asset that may go up in value.
- Provides a tax break – Deduct part of your mortgage, taxes and other expenses against the rent you get.
4 disadvantages of renting out your home
- May reduce enjoyment of your home – You have to share it with tenants.
- You still have to pay property taxes and other costs – You are responsible for maintaining the property.
- May create landlord issues – You may have to do extra maintenance and deal with hassles from tenants. You are responsible for meeting legal requirements.
- Creates tax costs – You may have to pay tax on income from rent and any unsheltered investments you make with your rental income, and part of the capital gains when you sell the home if you deduct a portion of your mortgage as an expense.
Check with your municipal government before you rent out any property you own. There are rules you must follow.