Having both been property professionals for some 23 years, we have always realized the value of owning property, both as security, as well as a form of generation passive income for retirement “one day”. Which is why we have always saved like crazy to fund & ultimately pay off the few investment properties we own, thereby creating a source of passive income. This passive income is by far not sufficient to “pack up” and travel the world, although we wish it were. We still need to work. Which raises the question: “How else can we generate passive income, while backpacking and seeing other countries?”
Let me first qualify the term “passive income”. This is income that is generated each month, whether we work, play, travel or were to be sick in hospital. In other words, this is not the same as working abroad, or getting paid for ones skills while travelling, like teaching a foreign language or any of the other jobs people do while travelling. When one owns a property (or a few), other than one’s primary residence, these create a rental incomes & can be managed by others in the absence of the owner.
Usually, one’s primary residence does not seem to lend itself to being an asset in this respect, as rather than create an income, one’s home is an expense. When we go away, over and above the usual expenses like rates & taxes and maintenance costs, someone needs to get paid to look after it. Is this emotional attachment & view we have about our homes short sighted?
Over the last few months, rather than view our home as a burden when we are away travelling, we are trying to take a fresh look at our home, with “new eyes”. Some years ago, we started with an adventurous project to add on a really large, luxurious master bedroom, with a lovely garden & pool view patio, a luxurious en-suite bathroom, separate toilet and a small additional utility room. The external structure was built, and the next phase would be completing the inside layout & finishes. In the meantime, our priorities have changed somewhat & we would be quite happy retaining our existing bedroom and home as it currently is.
So, now let’s look at the potential of that same, large, incomplete home extension that we really don’t need. It could easily be completed as an entirely self contained, 1 bedroomed apartment, with an open plan kitchen, living room, separate bedroom, and modest en-suite bathroom, all within the same 60 sqm footprint.
What does this all mean? We are not too sure yet, but somehow with this new layout, various options come to mind:
-Rent out the separate apartment on a permanent basis, thereby boosting cash flow, while at the same time having someone there to keep an eye on things while we are gone,
-Rent out our main home as well as the separate apartment fully furnished while we are travelling,
-Rent out one of the portions of the home, while using the other as a base in between travels.
-Create an Airbnb type unit to be available when we are home to run it, and let someone stay there to look after our home while we are travelling,
-Use this apartment to barter with and use as a HomeExchange with people in other places or countries,
Whatever the scenario, it definitely makes sense to change the way we intend completing the extension, as the two of us really don’t require it to be incorporated into our existing home. We really don’t need such a massive, many roomed home. We need a home that lends itself to:
- Ease of maintenance,
- Security while we are not home,
- Lock up & go liveability,
- Simple living.
Not sure of the ultimate outcome of our project, but we are certain that it will be complementary to our dreams of enjoying “MidlifeBackpacking”, so watch this space.