How to create income from your home

2 ways to create income

1. Rent out all or part of your home

Consider this option if you have:

  • a second or additional property to rent out for all or part of the year,
  • an extra room or a separate apartment to rent out, or
  • the space to set up a bed and breakfast.

Learn more about renting out your home.

2. Borrow against the equity in your home

Consider this option if you:

  • do not want to move or rent out your property,
  • have paid off all or part of your mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition,
  • can afford to carry a reverse mortgage or some other form of debtDebt Money that you have borrowed. You must repay the loan, with interest, by a set date.+ read full definition, and
  • are not worried about taking the money away from your estateEstate The total sum of money and property you leave behind when you die.+ read full definition.

Creating income

The amount of income you get will depend on a number of factors:

  • how much you borrow
  • the interest costs on your loanLoan An agreement to borrow money for a set period of time. You agree to pay back the full amount, plus interest, by a set date.+ read full definition
  • the amount of your monthly loan payments
  • any restrictions on the loan
  • the return on any investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition you make with the money or the rate for any annuityAnnuity A contract usually sold by life insurance companies that guarantees an income to you or your beneficiary at some time in the future. An annuity is a contract with a life insurance company. When you buy an annuity, you deposit a lump sum of money, and the insurance company agrees to pay you a guaranteed…+ read full definition you buy with the money.

Learn more about borrowing against your home. Find out more about investing for income and how annuities work.

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