• Home
  • About
  • Advertise
  • Contact
  • Policy
  • Guest Post
  • Archive

One Cent At A Time

A Personal finance blog to get rich

  • Email
  • Facebook
  • Pinterest
  • RSS
  • Twitter
  • Beautiful Life
  • Becoming Rich
  • Beginners Guide
  • Extra Income
  • Productivity
  • Saving Money

The Cost of an Extra Room in your Home

November 30, 2012 5 Comments

Share this:

  • Tweet
  • Email

Do you have extra rooms in your house? What are you doing on it? Do you put some things in it or you just leave it bare?

Extra Room

There are many advantages of having an extra room in the house. You can turn it into a guest room; you can have a space for emergency purposes, and temporary storage of your things. The extra room can be considered an asset if you can use it for a purpose. However, if the room is left bare and without a purpose, you have to start thinking what to do with it.

If you are still planning to build your house and is considering an extra room, it is highly recommended that you assess first the would be expenses. Not because you have a large property means, you will build a house without careful planning. In this day and age, we should always be wise in decisions. Money is not earned that easy so let us make sure we make the most out of our earnings.

To magnify that you need to use that bare extra room in the house, I will explain in this post how much you spend on every space in your property even if you are not using it.

Know the Size of your Property

First is to determine the total size of your property. For the purpose of sampling and calculations, let’s use a property with 150 square meter lot. 70% of your lot is being covered by your house while the 30% serve as the garden and the garage. 70% means 105 square meters. From the 105 square meters you can now divide it according to the size of the rooms in the house. Let’s just say that your extra room covers 15 square meters.

Determine the Cost per Square Meter

Asses how much is the current cost of your property. Again, the cost should be the current cost and not the acquisition cost. Note that houses and lots are one of the properties that do not depreciate its value. Year by year, the cost goes up. The cost of the property depends on what state you are in.

In NY, a property is within the range of $500,000 but you can get a lower property cost in other states. Let us say you have a $500,000 property. That translates to around $3,300 per square meter. If your extra room covers 15 square meters, then the cost of the space is $49,500 per year or $4,125 per month.

Property Tax

Tax due depends on the state you live in and the market value computed by the assessor. But for the sake of computation, let us say your property has an assessment rate of 10% of $500,000; this translates to $50,000. Tax is usually 25% of the assessed value, which is equivalent to $12.500.

Coming from this, the tax your extra room is covering is $1,250 per year or $105 per month.

Other Dues

Your extra room even if bare uses electricity when lighted. Let us just say you are using CFL then you are spending $4 per month for that. Cooling may also be needed to avoid spread of bacteria and dirt. On a monthly basis, an average of $50 is spent in AC systems. Of course, you need to clean the room. Cleaning agents allocated can be as much as $50 per month.

What to Do to Maximize the Cost

Adding all the above will give you $4,334 or roughly $5,000 per month or $60,000 per year. Imagine that, allocating such amount without something in return? What a waste! That is why it’s important that you make it as an asset more than just a property. You cannot do anything to minimize the cost. Instead, maximize the use of the room so it will compensate the monthly expenses.

There are ways on how to make it income generating. You can put up an online store and make it your stock room. You can also make it as your office and start a work at home job there. The most common others do is to have offer it for rent. If the extra room is detached from the house, you can turn it into a store. Think of anything that will make it an income generating space.

If you cannot make it income-generating, make it sure you use it for something and not just leave it bare. You can turn it into a media room, music room, playroom, home theater, or study room. If the extra room is near the living room, you can turn it into a social area where you entertain your guests.

Spending $5,000 per month is no joke. You could have allocated that amount to other things that are more important. Instead of regretting having an extra room, think otherwise and start making bright ideas to maximize the room.

The Alternate view about an extra room

To the contrary to above, an extra room can be used up in various ways for monetary gain. Let’s look at some of them

1. An extra room increases home equity and hence, the resale value

2. Extra room can be rented out which can cover a portion of your mortgage.

3. An extra room can be used up for hobbies, I have a friend who converted their extra room in to movie theater.

4. An extra room can be used for home-based business

Readers, do you have an extra room? Is it a money earner or a money waster? 

LIKE THIS POST?
I agree to have my personal information transfered to MailChimp ( more information )
Join our community of 8000+ subscribers to increase your net worth and build wealth
We hate spam. Your email address will not be sold or shared with anyone else.

Share this:

  • Tweet
  • Email
The tool that changed the way I manage my personal finance - Personal Capital, The Best Free Personal Finance Tool

Want to start a WordPress blog now? The onecentatatime.com blog is hosted by Siteground Web Hosting. For only $3.95 a month, Siteground can help you set up and host your website/blog quickly and easily.

About the Blogger Hi I am SB, a personal finance enthusiast with a career in software development. I am an immigrant to the USA since 2005, after being born and brought up in India. This 40 something technocrat lives and breathes personal finance whenever he gets time from the day job, job as a husband and a dad

Some links on this page may be affiliate links, if you make a purchase following the links, I may earn a commission. Read affiliate disclosure here
« Benefits of Shopping at Farmer’s Market
Weekend Chit-Chat – The Redesign Edition »

Comments

  1. Michelle says

    November 30, 2012 at 10:25 AM

    We rent out one of our extra rooms to my sister. It’s an easy $325.

    Reply
  2. CF says

    November 30, 2012 at 9:35 PM

    I wish we had an extra room! I could use an extra closet even, in our 500 sq ft condo 🙂 We had hoped to get a two bedroom in order to rent out the room for extra $$, but it didn’t work out this time. That’d be the main reason for us to have an extra room.

    Reply
  3. Pauline says

    December 2, 2012 at 10:43 PM

    I am renting the extra space too, it is easy extra money if you don’t mind having other people in your house.

    Reply
  4. Lerma of US Visas Migration Expert says

    December 10, 2012 at 2:48 AM

    I am also planning to use the extra room for rent it to other individual so that we can earn added income from it.

    Reply
  5. Scotty Crider - Less Job More Income says

    December 13, 2012 at 3:04 PM

    My wife and I have been discussing the possibility of adding some extra space to our house for this purpose but it really puts it in perspective when you break down all the costs like that.

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.



Create your own blog in 20 minutes and $20

Personal Capital, a free tool to change your financial health today

I use and suggest Upstart, for your personal loan need

CreditKarma, a free tool to check your credit scorey

I use Coinbase, for my crypto investments

101 Cents at a Time

101 Ways to Earn Extra Money on the Side
201 Frugal and Perfect Birthday Gifts
101 Ways to Save Money Everyday
101 Ways to be Better and Successful at Work
101 Ways to Save Environment and Energy
101 Frugal and Romantic Anniversary Ideas
101 Low-Cost Men's Fashion Ideas
101 Personal Finance Tips
101 Ways to Reuse Household Stuff
101 Things to Do, When Nothing to Do
101 College Graduation Gift Ideas
100 Tips for Ecommerce Startup
101 Ways to Enjoy Indoor During Winter
101 Ways to Beat Procrastination

Popular Posts

Quick Cash - How to make $100 legally, in a day
Living well on less than $15,000 a Year
Top survey sites for side income
What to do when auto repair goes wrong
Where should I invest my money now?
20 Ways to be productive and happy at work
51 Ways to get out of debt
Be a better person in 15 days, 15 ways
Income ideas for retirees and senior citizens
51 side jobs for college students
Urgently need a large amount of money?
Should I buy or should I rent?
Best Personal loan providers
25 Ways to save environment
25 DIY car repairs to save money
How to decorate office cubicle
How to show your wife you care
50 Financial Rules for Success
51 Frugal weekend family activity ideas
Become Rich By Saving 1 Hour Of Daily Wage
How much do I need to save for retirement?
How to negotiate your salary

Follow us on FaceBook

About Author

SB

Blogger by choice and IT manager by profession. Finance is my passion and gardening is my greatest satisfaction. Born in India, settled in US, Husband and a father. I created this blog in 2011 with a vision to help others. Thanks for your patronage. More info on my "about" page.

View all posts


Subscribe

Join our community of 5000+ subscribers to increase net worth and build wealth

Advertisements

Personal Stories

How I got a new HP computer replaced
Was COVID circulating in USA in fall of 2019?
How my credit score went up 800+
Why I didn’t invest in Bitcoins
How I controlled impulses to buy things
Why this blog is named One Cent at a Time

Subscribe via Email

Site Disclaimer

Disclosure of Material Connection: Some of the links in this web site are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
Read full Affiliate disclosure


One Cent at a Time is published by SB. The opinions expressed herein by him are his own and not those of his employer or anyone else. All content on One Cent at a Time is for entertainment purposes only. By reading this blog, you agree that SB and/or One Cent at a Time is not responsible for any actions taken after reading this blog. For the full disclaimer, click here .

Major Media Mention

One Cent at a Time Media Appearances

Copyright © 2023 One Cent At A Time · Designed by Nuts and Bolts Media