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Making ends meet: 6 ways to escape paying the interest rate increases on your home loan

Any extra space on your property can be rented out as vehicle parking. Picture: Get Lost Mike/Pexels

Any extra space on your property can be rented out as vehicle parking. Picture: Get Lost Mike/Pexels

Published Jun 28, 2022

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Times are financially tough right now; food and fuel prices are increasing and rising interest rates mean homeowners will be forking out more on their bond repayments.

Depending on the value of your home, you will have to pay a few hundred or even a couple of thousand rands more on your home loan instalment from the end of July – and this figure will only be increasing over the coming months.

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Economists and home loan experts predict the repo rate, and therefore the interest rate, will be hiked by another 0.5% in July, meaning that owners of properties of these values will pay the following amounts more on their home loans:

  • R1m – R316.45
  • R1.5m – R474.68
  • R2m – R632.90
  • R3m – R949.35
  • R4m – R1 265.80

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    While many people are trying to make ends meet by taking on side hustles or second jobs, demanding work and family commitments plus lack of time and/or disposable money make this impossible for some. This means they are living the same lifestyles in the same homes with the same monthly incomes, but needing more money to do so.

    As a homeowner you may therefore have to find other ways to afford the increases on your home loan repayments. After all, the interest rate hikes are going to keep coming every second month so you need to be able to keep up with their impacts.

    Fortunately, there are some ways you can do that without taking on a second job, or even doing much work: let someone else pay the extra on your home loan instalment. Your property can bring in the money to cover your bond increases if you think creatively.

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Here are some ways your property can help pay for itself:

1. Rent out your driveway or garage

Many South Africans do not have space on their properties to park their vehicles, or perhaps they have more vehicles than space available. And with security being a concern, having a safe space to park their cars is paramount.

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If you have a garage that is not being used, or even a driveway that will allow someone to park their vehicle off of the road, then consider renting this out. You may even have an empty space behind locked gates that is big enough to accommodate a car or perhaps a boat.

The amount you charge is entirely up to you, and you could advertise your available space on neighbourhood Facebook pages or WhatsApp groups. You could rent your garage, driveway, or unused grass or gravel patch on a daily, weekly, monthly, or even annual basis – it is completely up to you. There are also some companies in South Africa that facilitate the private leasing of parking space by listing available spaces and allowing people to search for them, much like finding a property.

Before jumping up and doing this straight away though, make sure your life will not be inconvenienced by possibly having your own parking space blocked or restricted, or compromising the security of your own home and property. Also understand that the vehicle owner may come and go at odd hours or even be constantly in and out, so be prepared for that.

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2. Take on a house mate or boarder

This has long been a go-to for many homeowners, but if you have not considered doing this, now may be a good time. After all, your guest room that you keep so neat and tidy in case someone ever comes to visit and stay over may be going to waste.

More people are working remotely or taking time out to travel or search for new areas to live in, and you could very well find individuals or couples looking for a room to rent for short periods of time, perhaps a few days, weeks, or months. Whatever you decide to charge them in rent could cover the extra that you now need to pay on your home loan.

Alternatively, if you have an extra room and know that you have no use for it, you could consider renting it out for longer periods of time, and take on a house mate who will not only pay you rent, but can also contribute to other living costs such as food and electricity.

Again, however, you must make sure that you are really prepared to share your home with another person or people. Also be sure to interview and vet them carefully to avoid bringing criminal or unsavoury elements into your home – and life.

Another option is to list any unused space on Airbnb. This could be a great choice for people who live alone and would like to meet different people from around the country and world for short periods of time.

3. Rent out storage space

If, however, you have a spare garage, room, or outbuilding, but would prefer to not have people coming in and out of your life, you should consider renting it out as storage space. With so many people semigrating, emigrating, or just relocating, there is a growing need for storage space – either for short periods of time or longer.

The trend of living in smaller homes also means that people moving from bigger properties will have furniture or other property that they do not want to get rid of but cannot accommodate in their new homes. This has created many opportunities for people with unused spaces to rent these out for long periods of time, which is ideal as there won’t be a constant need for the owners to be checking on or needing things from their storage rooms.

Before you do this though, you need to make sure you have a written agreement in place to protect you against people coming and going from your property constantly and without notice. You will also need to contact your home building and contents insurance provider to establish whether you will need to pay more on your insurance premium (which you could add to the rental), and who will be responsible for any loss or damage to the stored property.

While this is an easy way to make a passive income, just make sure all your bases are covered from legal and insurance perspectives.

4. Become a market gardener

This is an interesting way to make money from your property with just a bit of work, and will suit someone who is retired or has time on their hands.

If you have green fingers or knowledge of growing fruit and vegetables, and have the available garden space, you could start cultivating your own mini-farm in your backyard. Not only will you be able to cut your grocery costs by eating your own produce, but you can sell excess food products to those in your community.

Obviously, you will need to know the right practices to grow good quality produce, but once you have that sorted you could have your own thriving fruit and vegetable market, especially if you gain a reputation for supplying fresh, organic food.

5. Hire out space for events

Fair enough, this may not be suitable for most homeowners, but if you have a beautiful garden or even a unique room in your home, you could make it available for events.

A well-maintained and manicured garden with lush lawn could be the perfect place for a small, intimate garden wedding, or even a spot for photoshoots. And if you have a beautiful home interior you could hire it out for dinner parties. Many parents also look for safe and undercover spaces to host their children’s birthday parties – and if you have a play area or pool, even better.

Granted, this method of generating passive income from your property may not bring in a constant flow of cash, but the amount that you could possible hire the spaces out for each time could be enough to cover a few months’ worth of home loan repayment increases.

Like some of the other ideas above, just make sure that you are protected against certain events and conditions such as bad weather in the case of a wedding or load shedding should an event be held inside your home.

6. Rent out a room for a home office

If you have an extra room in your home, or an unused outbuilding, but would prefer to not have people living with you, then you could always rent it out as a home office.

With remote working becoming the norm, more people – and even entrepreneurs, need a set office space in which to work. After all, not everyone who works from home has an extra room to dedicate to their work or is happy operating from their bed or dining room table. Some people may even have the space but prefer to leave the home to go to work and return when they are done.

Another advantage of this is that you will always have someone on your property when you are away at work or out of the house for other reasons.

All you would need to do is ensure that the space has a desk and chair – possibly even shelving, strong and reliable WiFi access, and enough plugs to accommodate laptops, computers, or other electronic equipment a remote working tenant may need.

Make sure, however, that you incorporate any increases to your WiFi connectivity or electricity costs into the rental and also consider the by-laws if your tenants will be having clients visiting during the day. Ideally though, you will want a tenant who will be working alone and not having visitors or clients.

If you have an inverter or generator to keep power and connectivity on during load shedding or power outages, you could also charge a little more on the rent.

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