Put your home to work for you: Making money from unused space

The kids are gone and out on their own (at least for the moment), you are facing retirement and your friends are saying that it's time to put the family home on the market. They have a point -- four bedrooms are more than you need and the cost of heating and maintaining a large home increases every year. Still, your old home has memories and loveable quirks that you won't find in a sleek, new condo. Below are a few ways to make your home pay for itself:

1. Take in a boarder. Renting a room in your house may not sound appealing at first, but such a move can give you the money you need to pay your property insurance and taxes without dipping into your retirement savings. If you live near a university or in an area that has a demand for temporary housing (such as near a medical center or political hub), you have a natural pool of candidates for that extra room. Ideally, the space you rent out should have access to its own bath, and a private entrance is a plus. Whether you include utilities, parking and/or kitchen privileges is up to you.
2. Open a shop. Do you have a talent that you could put to work for you, such as cake decorating, quilting or jewelry design? If your home is in a high traffic or trendy area, you could sell your hand-crafted items without ever leaving your home. This works best if you have a front room that's easily separated from the rest of the house. Also, be sure to check your local zoning regulations and housing development bylaws. Not all areas allow commerce in private residences.
3. Rent your garage. If you don't want to rent your home out, consider renting your garage or other out building. Especially if you live in an area with apartment buildings and condos, there may be neighbors who need a place to house that second vehicle, boat or motorcycle. If you have a shed that has ample room, you might be able to get a monthly check for letting a neighbor store his lawn equipment or seasonal furniture there.

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