Here’s how to make money from your home


If you’re looking to lighten your mortgage load, or boost your cash flow, good news: There are lots of ways you can make money from the home you live in.

This week the latest Real Estate Institute data revealed there was annual price growth of 32.3 per cent in the year to the end of May, which took the national median from $620,000 last year to $820,000 in May.

That means anyone who has bought a residential property in recent years is likely to be carrying a hefty mortgage.

But these days there are many options for property owners wanting to put their house to work for them to earn some money.

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For those with a spare bedroom or two, one approach is to get in flatmates. While the concept of flatting might seem one for young adults, growing numbers of homeowners are getting in flatmates to help balance their budget.

Enable Me founder Hannah McQueen has clients who get in flatmates if they are trying to accelerate their financial progress or are working towards a big savings goal. It can be an inconvenience, so people tend to do it for a set period of time, rather than indefinitely, she says.

“But the returns can justify the sacrifices involved. To make it work, it’s important to think carefully about how long you want to do it for. So decide what you want to achieve, know your timeline for it and don’t be romantic about the impacts.Then be realistic and prepared.”

Selecting the right sort of person to live with is important too, McQueen says. “Someone who travels a lot for work, such as a pilot (pre-Covid), but needs a base can work well, for example.”

Another option is taking in a boarder, which is similar but different to a flatmate. A flatmate rents a room and shares the costs of other expenses such as utilities, while a boarder receives additional services on top of the room, such as laundry or prepared meals, included in their weekly rent.

For those willing to share their home space, having a flatmate or boarder can generate a decent passive income without having to do too much, McQueen says.

Enable Me founder Hannah McQueen says getting a flatmate or boarder to generate extra income can work well for those willing to share their space.


Enable Me founder Hannah McQueen says getting a flatmate or boarder to generate extra income can work well for those willing to share their space.

Tax might need to be paid on income earned from renting a room to someone, but how it is being rented, who it is rented to, and for how long determines what income tax is paid. Inland Revenue provides information on this.

It is worth noting the Government’s new tax rules around interest deductibility will not affect the main home. The current proposal is that interest related to any income-earning use of an owner-occupier’s main home, such as a flatting situation, will continue to be deductible.

The advent of Covid-19 last year reined in the Airbnb boom, but the short-term rental market weathered the storm. That means putting up rooms, or a secondary dwelling, in your house, or even a whole house if it is temporarily vacant, for short-term rental remains a way to earn extra income.

Stefan Nikolic, from short-term rental management company Zodiak, says each month there is an improvement in occupancy rates and, as the borders reopen and international travel begins again, the sector will only get busier.

But the success of a short-term rental does depend on the property’s location, he says.

“In cities, central areas are good as they attract visitors for business and for recreation. In Auckland, that’s the CBD, the city fringe suburbs along with parts of the North Shore and suburbs around Mission Bay. You want easy access to the city and amenities.”

An average Auckland CBD apartment rents for about $140 per night.

Abigail Dougherty/Stuff

An average Auckland CBD apartment rents for about $140 per night.

Even after fees have been paid, it is possible to make more money on a short-term rental than a long-term rental, Nikolic says.

An average Auckland CBD apartment would rent for about $140 per night, while a good Viaduct apartment could for up to $300 a night, and the average stay is for seven nights.

Outside city locations, the boom in domestic tourism means people with holiday homes in attractive destinations can use their properties to generate rental income, especially if there is technology in place to allow people to work.

However, anyone going down the short-term rental route needs to be aware of the relevant council rates and should talk to an accountant as there are a range of tax considerations at play, Nikolic says.

“Last-minute bookings are the rule of the day, so you don’t have a predictable income locked in as you would with a long-term tenancy agreement. Those new to short-term rentals need to get their head around that.”

It is also important to factor in costs like cleaning, which is critical to the success of a short-term rental, and marketing, he adds.

Parking is at a premium in city fringe suburbs like Mt Eden and that means renting out a driveway or car park space is now an option.

Abigail Dougherty/Stuff

Parking is at a premium in city fringe suburbs like Mt Eden and that means renting out a driveway or car park space is now an option.

Flatmates and short-term rentals are not options suitable for everyone. But the concept of shared space is broader than living arrangements and provides other creative options for earning money. founder Matt Knight says residential property owners can now list their properties, or parts of them, for rent as a shoot or event location, as storage space or for car parking.

Since lockdown last year, there has been a steady increase in the number of residential properties listed under the shoot location category and film production companies and ad agencies are regularly surfing the site for locations, he says.

“Pricing varies depending on what you have to offer: some of our listings go for as much as $8000 per day, but for the average-sized home you’d be looking at $1500 to $2000. A one-day booking in our shoot location category can often have the same return as a whole week from short-term rental websites.”

Homeowners with secure extra or unused space, such as an empty basement or a garage, can more effectively utilise it by leasing it out for storage for a set period of time, but it is car parks which are a particular growth area, he says.

“We often see central city car parks getting snapped up within hours of apartment-dwellers listing them on the site. In city fringe suburb areas, people can rent out their driveway or car park space if they are not using it and increasing council restrictions on CBD parking mean this is growing in popularity.”

Usually car parks are listed for monthly rental and the owner can expect to bring in anything from $120 up to $550 per month depending on location and amenities, Knight says. “There’s not huge prices involved here, but it can be a nice bit of extra cash flow.”


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