Your house could be worth much more as an asset than as a piggy bank.

There's a lot of data showing that homeowners tend to have more money saved for retirement than those who rent. But sometimes even those savings and investments, combined with Social Security and other retirement incomes, just aren't enough. 

If you own your home or have a lot of equity, you may be tempted to sell and downsize or refinance to come up with extra cash. But before you do, there are several ways your home can work as an asset, producing income for years and years, versus selling for a one-time payoff or refinancing and giving away value in interest payments.

Let's take a look at three. One of them might be exactly what you need.

1. Renting might be worth a lot more than selling
For many retirees, the thought of dealing with a potentially troublesome tenant leads them to dismiss this option out of hand. However, this could be the the best option, and it's probably a lot easier and financially rewarding than you might think.

Furthermore, there's a lot of evidence that now is a great time to consider this option:

US Median Asking Rent Chart

US Median Asking Rent data by YCharts.

As you can see, the trends are pretty clear: Rents are rising, and vacancy rates are dropping, indicating that available rental inventory is shrinking. 

There are thousands of property management companies in the U.S. that can handle almost all of the interaction with tenants, including billing and rent collection, for a fee (usually a percentage of the rent charged). These companies can also handle repairs and maintenance, further simplifying the process for the homeowner. In many cases, having a professional deal with these things is well worth the price for the service. 

If you're up for handling it yourself, companies like Zillow (ZG -2.30%) and Trulia (NYSE: TRLA) (which are merging) have made it much easier to get your property in front of potential renters and even to find companies to help you manage it if you need the help.

If you are thinking about downsizing, relocating, or spending your retirement traveling, using your home to produce regular income as a rental might be worth a lot more over time than just selling it outright.

2. Vacation rental properties in demand

Your house doesn't have to be in Vail to have appeal. Source: Wikimedia Commons user Hayleybutlerhs 

If you live in an area with geographical appeal to vacationers, this might be a better choice than a year-round rental -- especially if you would like to live in the home part of the year. 

Much like full-time renting, using your home as a vacation rental property is probably easier than you think. Companies like HomeAway (AWAY.DL) have made it much easier for renters to find the perfect vacation rental, and those trying to rent get more exposure to their properties. Chances are the same local property-management company that does year-round rentals can manage your vacation rental property, too.

Additionally, vacation rental rates can command a significant per-day premium over full-time rentals, so, depending on the seasonal demand, you might be surprised how much income your home can generate. 

3. A reverse mortgage lets you stay in place

A reverse mortgage might be the best way to cash in on your home equity. Source: Ken Teegardin.

For retirees who seek extra income for regular expenses, home repairs and upgrades, or simply a better quality of life, a reverse mortgage might be the best bet. There are several kinds:

  • Single-purpose reverse mortgages, offered by state and local government agencies, are the best and cheapest way to get cash for something like home repairs or taxes.
  • HECMs, or Home Equity Conversion Mortgages, are federally insured and allow you several options, including a line of credit or monthly fixed payments.
  • Proprietary reverse mortgages are also offered by private companies but may come at higher costs. On the other hand, you may be able to take out more equity than with an HECM or single-purpose reverse mortgage.

The benefits of a reverse mortgage? You can get a lump sum or monthly payments, depending on your needs, immediately providing you with that extra income, and the repayment doesn't have to be satisfied until your death. Compared to a home equity loan that immediately requires repayment, this is likely a better choice for retirees.

The downside, of course, is that your heirs may not be able to retain the property if they aren't able to satisfy the terms of the reverse mortgage. So carefully consider your estate plans if you choose this route. Furthermore, these are mortgages, so there are closing costs and fees that will further eat into your equity. 

Make sure you choose the type that gives you access to the cash you need and doesn't take away more in fees than is necessary.

Putting your assets to work versus cashing in on the dollar value
While real estate varies greatly from market to market, don't just look at your house as a bank account. It's an asset that has value in what it can produce, just as it has dollar value if you sell. 

A lot of you readers will see 80 and beyond, so putting your house to work generating income might be worth a lot more than selling it outright, and it could also give you more options later in retirement. Getting that lump sum is nice, but getting paid over and over is even better.