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Ways to Make Money From Spare Room: 9 Options to Try this 2023

Do you have a spare room you’re no longer using? How about earning extra cash from it? Yes, you can!

Many property owners consider their personal spaces as a means to earn passive income without learning advanced technical skills.

Best of all, rentals are always in-demand. You can profit from these empty spaces without being a full-time real estate investor.

Today’s article will show you nine ways to make money from a spare room and get it out in the market so you can start cashing in regularly.

Can You Make Money From Spare Room?

With more than 35% of U.S. households on rentals, you’ll have a large window of opportunity to make your space a cash-generating property.

Whether you plan on renovating the area to become a permanent rental space or polishing it up for in-season special events, there’s a huge potential for extra income.

How Much Can You Make by Renting Spare Rooms?

Statista shows an average $1,320 monthly rental for a two-bedroom apartment in the U.S.

Less expensive states like Oklahoma average $957 monthly rent compared to New York’s $2,552 price point of the same-sized property.

Ultimately, how much you earn depends on location, your spare room size, the type of space you want it to be, and the duration of a client’s stay.

For example, a property fit for photo shoots can charge $100 an hour compared to a typical storage space’s $180 a month.

Looking at a spare room’s earning potential, you can say it’s an excellent passive income source, even for beginners.

What You’ll Need to Make Money From Your Spare Room

Before earning extra income from your unused properties, there are vital elements you’ll need to factor in to ensure your spaces are ready to welcome guests.

  • Spare Room Specifics: How big is your extra space? Things like its condition and the location within or outside your house are required to help you assess which part of it you’d want to rent out.
  • Lodger Agreement: This agreement between you and potential tenants regarding terms of occupancy, including, but not limited to, bills and taxes. It can be a written document or verbal agreement, whichever you prefer. Both are legally binding, though a written document is often recommended in case of disputes.
  • Publicity Strategy: Letting people know you have a room for rent is the first step to attracting clients. Decide on your promotional strategy. You can create a Facebook page for your rental properties or let your family and friends spread the word.
  • Renovation and Furnishing Cost: Whether renting out a bedroom, garage, basement, or apartment, factoring associated costs is required. Remodeling can cost $15 to $60 per square foot and can go up depending on what space you’re working on.
  • Payment Terms: You can charge by the hour, monthly, or on a long-term lease covering a whole year. Specifying price points for each rental duration is essential to give prospective tenants enough options to fit their budget. You can use this average rental guide from RentCafe to help with pricing.

9 Ways to Make Money from Spare Rooms this 2023

There will always be people looking for rental spaces in any state. Having a list of options to capitalize on your vacant rooms is your best starting point.

Here are nine ways to earn extra money from unused spaces.

  1. Clean Up and Rent Out Unused Storage Space
  2. Become a Host to a Foreign Exchange Student
  3. Convert a Spare Room Into an Office Space
  4. Become an Airbnb Host
  5. Get a Housemate to Rent Your Spare Bedroom
  6. Turn Your Empty Space Into Special Events Rental
  7. Open Your Home to Vacation Rentals
  8. Convert Your Spare Room to a Studio Space
  9. Rent Out a Parking Space

1. Clean Up and Rent Out Unused Storage Space

People who need to declutter their homes but don’t want to throw away their things are looking for affordable storage space.

Given the high demand for these facilities, clients are often left with expensive options that may well be above their short-term budget.

Cleaning up your storage and making it available for renters makes you an attractive choice, especially for those who plan on moving out of the city to get paid but want to leave their items behind safely.

How Much Can You Make?

In a 2022 report by Consumer Affairs, a 5 by 5-foot unit starts at $90 monthly, goes up to $160 a month for a 10 by 10 unit, and up to $290 a month for a 10 by 30-foot unit.

A single unit can earn you $3,500 in passive income annually. This can go up or down depending on the renter’s duration of use and the size of your storage space.

Remember that these are average figures and often include add-on insurances, which you’re not required to have.

You’re free to customize your pricing and offer discounts for clients who want to use the space long-term.

What Makes This Option Great?

There’s not much heavy lifting involved in this option. You clean up your storage, put it up for rent, and that’s it! Best of all, you don’t have to worry about frequent maintenance.

  • Fees/Commission: You won’t have to pay anything unless you hire someone to clean your storage. However, minor repairs like electrical wiring might cost $40 an hour.
  • Payment Method: Bank transfer and cash

2. Become a Host to a Foreign Exchange Student

Do you have an extra bedroom you don’t mind renting out for a stranger?

Hosting an international student for a fixed-term agreement is an excellent way to earn extra bucks while making new friends from various cultural backgrounds.

It’s also one of the most efficient ways to start a business from home, minus the technical know-how often required from entrepreneurs.

How Much Can You Make?

Your potential income varies depending on your space, but school or government-sponsored exchange studies can offer host families a $1,000 monthly stipend.

What Makes This Option Great?

Hosting a foreign exchange student is a safe and rewarding experience for you and your family. You get to learn from them for free while keeping that steady source of rental income.

Being a host family also boosts your landlord profile. It makes you more attractive to professionals like professors and researchers looking for a more interactive and quality home experience on foreign soil.

  • Fees/Commission: You’ll only need to consider add-on expenses like food and electricity that come with the additional house member. Usually, the monthly stipend from sponsoring entities is enough to offset these expenses.
  • Payment Method: Bank transfer and cash

3. Convert a Spare Room Into an Office Space

With remote and hybrid work setup at an all-time high, you bet many people want a personalized office space of their own, away from the hustle and bustle of an actual workstation.

One of the main markets for this option is individuals starting a virtual assistant business requiring them to coordinate with their team regularly.

Renting an office in a residential space can be a more affordable alternative than leasing one in a commercial building.

How Much Can You Make?

Again, this depends on your property size. The average charge for commercial leases runs between $2 to $23 per square foot per month, depending on location.

But because you’re not paying for a mediator, you can price your property a fixed $500 monthly or more.

What Makes This Option Great?

This option is perfect if you don’t mind spending a bit to revamp your room and make it an office space.

You can increase your space’s attractiveness to potential clients with basic furnishings like a desk, comfortable chairs, and file cabinets.

The better the interior, the higher you can charge. You can price your office space for as low as $500 up to $2,000 monthly.

  • Fees/Commission: This runs between a few hundred to thousands, depending on how much work and add-on furniture your space needs to convert into an office setup
  • Payment Method: Bank transfer and cash

4. Become an Airbnb Host

Do you have an apartment or vacation house you won’t be using for a while? Why not put it up on Airbnb? This platform has a solid record of attracting global tenants for long and short-term rentals.

If you’re into the rental arbitrage business, dealing with Airbnb makes managing your income flow from multiple properties easier.

How Much Can You Make?

Airbnb hosts report earnings between $4,000 to $17,000 annually. Of course, this can fluctuate and is largely affected by travel trends and market competition.

What Makes This Option Great?

One of the biggest Airbnb advantages is its Host Guarantee program. This protects you from any damages or payment issues incurred during a guest’s stay at your place.

  • Fees/Commission: You’ll shoulder maintenance fees for all your Airbnb properties. The platform also determines add-on fees that’ll be included in your property price on top of the base price you’ve set.
  • Payment Method: Fast Pay, Payoneer, PayPal, Western Union, and bank transfer

5. Get a Housemate to Rent Your Spare Bedroom

If you want to start small and prefer dealing with people you know, finding a housemate to rent your spare bedroom is a great alternative.

It’s an easy means to become a property manager without doing publicity stunts to get the word out.

You can check with family and friends to see if they know someone looking for affordable lodging and take it from there.

How Much Can You Make?

The average rental for a one-bedroom space range from $800 up to $2,000. Depending on its inclusions, you can agree with your housemate for a figure between this range.

What Makes This Option Great?

Renting a spare bedroom is a great way to earn extra cash without constantly seeking clients. It’s also low-maintenance, given that it only covers minimal space within your house.

  • Fees/Commission: Apart from the minimal touch-ups you’ll need, you’re all set. Minor bedroom repairs often cost less than $500, so it’s best to have spare cash ready just in case.
  • Payment Method: Bank transfer and cash

6. Turn Your Empty Space Into Special Events Rental

If you have an unused space capable of hosting many people, why not transform it into a special event rental? This is a great way to start an Airbnb business without owning an entire house.

Professional event organizers looking for ideal spaces to host events and celebrations use the platform to find areas to lease for short periods.

How Much Can You Make?

You can charge by the hour or per day. To give you an idea, Airbnb event spaces can charge from $450 a night to $1,000 or more.

What Makes This Option Great?

Renting out event spaces is ideal if you have a large area to offer. Special occasions also happen constantly, making your property fit for all seasons.

  • Fees/Commission: The startup budget for building an event space can go from $50,000 or more, depending on the unique decorations or technology you’re installing. It’s a one-off thing, and you’re all set moving forward.
  • Payment Method: Bank transfer and cash

7. Open Your Home to Vacation Rentals

Are you often away from home or have to move out for work? Listing your home among vacation rentals in your area is the best way to get additional income while you’re away.

For properties with multiple rooms, renting each to different individuals is a great way to earn more money by being an Airbnb host.

This way, you generate cash from the vacant spaces without worrying about insurance and damages.

How Much Can You Make?

Vacation house rentals average $137 a night based on Airbnb’s global statistics. If you’d like more flexibility on pricing, you’re free to rent it out off-platform.

What Makes This Option Great?

Turning your home into a vacation rental can be your best bet to earn enough money for your property’s monthly mortgage.

If your lifestyle demands you to always be on the road, making your home an income-generating machine can help you start your journey to financial freedom.

  • Fees/Commission: You’ll shoulder the maintenance cost plus add-on fees of your chosen rental platform
  • Payment Method: Fast Pay, Payoneer, PayPal, Western Union, and bank transfer

8. Convert Your Spare Room to a Studio Space

The gig economy has opened doors for creative professionals to showcase and earn money from their art.

Many painters, writers, and professionals who want to start a photography business seek a personal space to serve as their creative hub.

By providing them with this private area, you can enjoy a steady income stream from dynamic professionals who can give you excellent referrals too!

How Much Can You Make?

Most studio spaces charge by the hour, ranging from $30 to $70. But you can always modify the rates to fit your agreed payment terms.

What Makes This Option Great?

Renting studio spaces are great for your landlord portfolio and helps widen your professional network. Satisfied renters can help you land your next client once they decide to move out.

Their professional background also makes them an excellent source for online reviews and testimonials to help boost your credibility.

  • Fees/Commission: You don’t need to pay any commissions, but you can factor discounts for clients who provide you with referrals to other renters
  • Payment Methods: Bank transfer and cash

9. Rent Out a Parking Space

While not exactly a room, parking spaces are one of the most in-demand spots in urban areas, and if you’ve got an expansive driveway with extra spots, renting it out with other drivers is a solid way to earn passive income.

How Much Can You Make?

You can earn $300 a month per vehicle in your parking space.

You can charge lower if that sounds like a hefty amount to charge your neighbors, but considering the amount they’ll pay for building their own, that’s a decent cost.

What Makes This Option Great?

Parking spaces require little to no maintenance cost. It’s time efficient and attracts drivers you’ll likely know enough within your neighborhood.

  • Fees/Commission: You don’t have to spend anything to get started
  • Potential Income: Bank transfer and cash

Why You Should Consider Making Money from Spare Rooms

Property owners have varied reasons for renting out their rooms apart from income. Here are four reasons why you’d want to get that unused property open for guests.

  • Beginner-Friendly: You don’t need a license to be a host. You can start earning money if you have the room prepped and ready to host people.
  • Pays Well: Regardless of your choice, rental properties have a remarkable record for bringing significant income to landlords. In a recent IRS report, 10.6 million Americans have declared rental income when filing their taxes. This shows the high potential of this side gig to become a full-on business on its own.
  • Long-Term Investment: Real estate has been in the game for decades. Investing in your spare rooms and making them attractive for tenants is a wise decision to develop a healthy cash flow, which can help you expand your business if necessary.
  • Networking Opportunities: Meeting new people may not be your forte, but there’s no denying the fact it helps your business bloom. Short-term rentals allow you to meet people from different backgrounds, expanding your personal and professional network.

Problems With Making Money From Unused Spaces

Despite the enticing benefits of making money from your vacant spaces, it also has factors that can backfire with a lack of planning.

Here are the things you should be wary of:

  • Increased Maintenance: You can’t accurately predict your tenants’ lifestyle, and there’s a chance they mess up your room’s pristine condition during their stay. This results in more frequent and higher maintenance costs.
  • Inconsistent Income Flow: Renting a space doesn’t guarantee year-round occupancy. You’ll have to consider the costs of keeping your place clean even with no renters.
  • Reduced Privacy: Expect reduced privacy unless your spare property is away from your main home. Even if you don’t frequently run into your tenants, having someone inside your house can be off-putting to some owners.
  • Income Tax: Rental income is taxable. Your final payment will be what’s left of all tax cuts from your tax bracket and state and local income tax cuts.

How to Make Money from Spare Rooms: Step-By-Step Guide

Ready to begin your landlord journey? Let’s dive into the step-by-step guide to setting up your properties for rent.

Step 1: Identify the Spare Rooms You’re Willing to Rent Out

What vacant space do you have? Getting the specifics like location, dimensions, number of beds if applicable, and accessibility must be your top priority.

Later, this helps you decide the price points and identify key elements to improve to make the space more attractive for tenants.

Step 2: Upgrade the Room’s Look

Once done with the initial checks, next on your to-do list is to do the polishing. Any repairs, renovations, and upgrades should be completed before making your rental public.

Step 3: Decide on Price Points and Payment Terms for Your Rental Space

After revamping your spare rooms, decide on the fee and payment frequency. Will you be charging an hourly or monthly rate?

You’ll also need to consider the add-on fees you’ll incur when listing your properties on platforms like Airbnb.

Step 4: Publicize Your Rental Properties

Publicizing your rentals can combine social media promotion and word of mouth. Another option will be to post it on property rental sites like Zillow Rental Manager and Avail.

If you’re eyeing attracting local renters, Facebook Marketplace or groups might be your best bet on top of other socials you plan to advertise.

Step 5: Create a Tenancy Agreement

You’re not required to hire a lawyer to get this done, but real estate investors and landlords alike recommend it. A tenancy agreement indicates the contact details of involved parties, commencement, duration, rent, and other charges.

Things to Consider When Making Money From a Spare Room

If you think a real estate venture is for you, consider the following elements before sealing a deal.

1. Spare Room Type and Size

Your room type dictates a huge chunk of your rental price. When finalizing your plans, learn the average rental cost the market offers for your property size.

2. Maintenance Cost

Rental maintenance is only done once every three years unless you need it sooner. Make sure you stash a budget intended for repairs cost.

Doing so ensures you don’t derail your cash flow in case untimely damages need urgent attention.

3. Property Occupants

One often overlooked role of a landlord is to assess the kind of people you’re admitting to your property.

For instance, if you’re putting a bedroom space for rent and have a family member allergic to pets, you must ensure tenants don’t have furry friends or aren’t planning to get one during their stay.

Frequently Asked Questions

How Do I Know How Much to Charge?

Searching for similar properties online will bring out cost variation, which you can copy or use as a basis for pricing your place. You can also hire a rental valuation agent who can do the legwork and present you with the best options for a fee.

What Happens if Tenants Damage the Property?

The tenant can either pay to fix the damage or agree to use their security deposit. Either way, details must be incorporated into your agreement even before the start of the tenancy. Damages caused by wear and tear are considered a part of your responsibility.

Other Ways to Get Paid this 2023

Is becoming a landlord too complex for your liking? Here are other ways to earn additional income anywhere.

  • Make Money as an Online CoachAre you an expert in a subject relating to self-development? Consider being an online coach by learning what to set up and how to sell your service.
  • Get Paid to ShopThis gig is perfect if you enjoy shopping for others. Learn the best websites and apps for the best rates, coupon codes, and gift cards!
  • Get Paid to Watch Horror MoviesDo you love horror movies? Why not get paid for watching it from home? This article points to where you can do it and how much you’re getting paid.

Wrapping Up

Making money from spare rooms may look daunting for starters, but with the options we’ve listed, you’ll narrow your choices to those that fit your property’s setup.

What type of space do you have? Is there anything on our list you’ve tried before?

Share your thoughts in the comment section below, and feel free to share this article with your friends and family.

Leave a Comment

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