How can I generate income using my home?


There are several ways you can use your home to create income:


You may be able to redevelop your existing home into two residences. If you have room you may benefit from living in a smaller part of your home—or rebuild it entirely—and have less maintenance and utilities expenses as a result. You could then rent out or sell part of your home and create a new source of income that may help fund your retirement. Bear in mind that any extra money may impact your Centrelink benefits so make sure you explore the implications first.

Reverse mortgage

If you need extra income and have equity in your home you may be able to stay in your home for the long term. By arranging a reverse mortgage you can borrow money against your home’s equity and access the money as a lump sum or a regular income stream—or a combination of the two.

Unlike a normal loan, you don’t have to make regular repayments on a reverse mortgage but the costs are very high. The interest on the loan accrues and typically—once you die—the property will be sold to pay the amount owing. It’s important to understand the financial implications of a reverse mortgage. For example, what are the costs and what if you outlive your money? There will also be impacts on your estate—especially what you’re able to leave as an inheritance, which may end up being nothing.

Seek advice from a trusted financial adviser first and find out more about reverse mortgages at the MoneySmart website.

Rent out your home

If your home has more room than you need—or maybe it will one day—you can rent it out and aim to buy or rent a smaller property to live in. That way you have the chance to reduce your own living expenses and receive an income at the same time. Be aware that any extra income may affect your Centrelink benefits so make sure you look into the impacts first.

Sell your home

You can improve your cashflow by selling your home; but the downside is your pension entitlement may be affected—the proceeds from the sale of your home can be subject to income and assets tests. The positive side is you may be able to buy or rent a smaller home and lower your living expenses.


Important information

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It’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions before deciding what’s right for you. This information hasn’t taken your circumstances into account.

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.