When is it the right decision to use the value of your home or property to generate income? How should you go about it? There's no one right answer for everyone. Use this checklist to help you decide.
Should I sell?
This choice may make sense if one or more of these statements applies to you:
- I am ready to move to a smaller home
- I am ready to move to a lower-cost area
- I am prepared to rent instead of own, so I won't have to worry about costly repairs or property taxes
- I have extra property that I no longer need or don't want to maintain.
Should I rent it out?
This choice may make sense if you're ready to take on the role of landlord and at least one of these statements applies to you:
- I have extra property that I can rent out for all or part of the year
- I have extra space that I don't mind renting out, such as a room I could rent to a friend, or a legal, separate apartment
- I have the right kind of space to set up a bed and breakfast, and I enjoy playing host and meeting new people.
Should I borrow?
This choice can make sense for some people who need money to pay off debts or bills for things like home repairs or in-home health care. Before you borrow, make sure all of these statements apply to you:
- I don't want to move or rent out my property
- I have paid off all or part of my mortgage
- I can afford to carry a reverse mortgage or some other form of debt
- I am not worried about taking the money away from my estate
Getting income from your home: Clifford and Carmen's story
Clifford and Carmen are retired, but are starting to run short of cash due to health problems. To stay in their own home, they will need in-home care. How can they pay those bills? Read Getting income from your home: Clifford and Carmen's story.
Remember: As life changes, you may have to change the way you create income
Leaving your savings in your home or other property isn't always the best choice. Look at all the ways you may be able to free up cash if you need it.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.
