CBS Money Watch recently featured the 10 most expensive cities in America. Topping the list? New York City (specifically Manhattan). The list is compiled based on data comparing living expenses ranging from rent, coffee and even steak. The Council for Community and Economic Research found it costs more to live in the Big Apple than any other US city.
The cost of rent alone in New York City is prohibitively expensive. How can you relieve some of that financial pressure and be able to better afford your rent?
Image source: Anthony Quintano
Bringing in extra money can help improve your cash flow and allow you to keep living where you want. Let’s look at a few ways to earn some extra money in New York City.
What is Airbnb? On their website, they explain that “Airbnb is a community marketplace where guests can book spaces from hosts, connecting people who have space to spare with those who are looking for a place to stay.”
Since square-footage is at such a premium in New York, you might think you don’t have the proper space to rent out. Luckily, you can post all kinds of spaces for daily, weekly or monthly accommodations. If you have a guest room or a pull-out couch, you can post your space for rent on Airbnb.
Before signing up as a host, find out how to do so legally. Check your rental agreement to see if there are any restrictions you should be aware of. New York City currently has a law in effect that makes it illegal to operate like a hotel. Renting out an entire apartment as short-term rental, or for less than 30 days, is not allowed without a license. Renting out a guest room or shared space, however, can be legal.
It must be the owner or tenant’s own residence and they must stay on the premises with their guests. Inform yourself and follow the rules. The fines for illegal rentals are quite high – a fine for a first offence ranges from $1,000 to $5,000. You don’t want your rental to end up costing you money.
Image source: Wikimedia
To operate legally in New York, you must fill in the proper forms and collect fees and taxes. Skipping this step can also result in steep fines. It’s a good idea to meet with an accountant or lawyer before renting out your space to make sure everything is done right.
More information on hosting guests through Airbnb can be found in EZ Landlord Forms’ article How to Legally Lease Using Airbnb in NY, When 72% of Rentals Are Illegal.
If renting out part of your space just isn’t for you, there are other ways of improving your cash flow. “Side hustles” are gaining in popularity with people of all ages. But if you already work full-time, can you really build another income stream?
For many, side hustles are their first go at self-employment. Taking on a second job might not be possible or desirable, but starting a small side business is quite doable. When you’re the boss, you get to decide how much time you want to dedicate to your business and when you want to work. The possibilities are endless; a little imagination can bring in significant extra money.
New York is full to the brim with people and that means there are needs to be fulfilled. Have a think about what skills you have that others might want to learn. Whether it’s knowing a second language or knowing how to knit, there will be someone out there who is willing to pay for a tutor.
You can even take advantage of the tourists pouring into New York every day. Sign-up to a site like Vayable where you can offer unique experiences for visitors to the city. Get them away from the usual tour guides and show them the true side of the city and make some money at the same time.
What About Taxes?
Extra income earned from renting out a room or from a side hustle is taxable. The IRS expects you to declare it as income when tax time rolls around. On the plus side, you may now be able to deduct some of your current costs as business expenses, reducing your tax bill. Keep all of your receipts and create a spreadsheet of your expenses and earned income. If you need help, have an accountant prepare or look over your tax return.
Improving your personal finances and income can be done, even in high cost areas like New York City. With a little creativity, you can start making extra money, even if your time is limited.