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How much rent should I charge my lodger?
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# 1
Goleo
Old 16-02-2011, 10:59 AM
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Default How much rent should I charge my lodger?

Hello
I'm renting out a double room in my nice(ish) 3 bed house near Manchester to my friend. She is currently paying me, what i would class as friends rates - 200 a month including bills. But now she has a job it's time to put the rent up! How much is it reasonable to charge just for the rent (not including the bills)?
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# 2
poppysarah
Old 16-02-2011, 11:01 AM
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Dunno - do you get on well?
200 plus bills would make you a nice friend.

but see what comparables are.

What's she expecting it to go up to?
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# 3
silvercar
Old 16-02-2011, 11:09 AM
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Students pay 60-70 a week in a shared house plus bills. So 200 does sound generous.
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# 4
westlondonbuyer
Old 16-02-2011, 11:13 AM
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Where are you in Manchester? The going rate for flatshares is 350 for a room including bills for a superbly presented and equipped (dishwasher/Sky/tumble dryer) place in the centre of the city or the student areas such as Fallowfield and Burton Road. Somewhere scruffier or further out, yes, 200+

Your great mistake was in offering 'mates rates', as this makes it very much harder to formalise things like rent increases and notice periods. If I were you, I'd have a chat over a bottle of wine and try and get together a short contract on paper (your mortgage company would probably insist on it these days. Google 'licence of occupation').
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# 5
Incyder
Old 16-02-2011, 11:30 AM
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Really, its best to charge inclusive of bills as it gives the lodger a neat no hassle fee to remember and budget for.
I am a lodger in an ordinary 2 bed without sky, ensuite, dishwasher, tumble drier, net access.
I pay 70 per week (300 p.c.m) inclusive of bills and feel its fair.

350 inclusive, would be the most I would pay for somewhere but the place would have to be top spec and have off road parking.

Last edited by Incyder; 16-02-2011 at 11:33 AM.
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# 6
Jowo
Old 16-02-2011, 11:30 AM
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How does your friend feel about the switch from mates rates to market rate? Perhaps she thinks she's doing you a favour as she's not a stranger and she contributes sociability to the property.

It's always a problem mixing business with friendship. Friends do favours for each other, landlords don't. Minor tenant/landlord disputes can ruin personal relationships. Informality can lead to rights and obligations being affected.

You can find out the local market rent by looking at sites like Spare Room and the Gumtree.

Landlordzone and DirectGov have information about the Rent a room scheme whereby a live-in landlord with a lodger doesn't have to pay tax on the rental income below 4250 per year, approx 350 per month.

Does your insurance cover having a lodger?
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# 7
mlz1413
Old 16-02-2011, 11:32 AM
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To stay with the rent-a-room scheme, so you don't have to fuss about a tax return, then you need the rent to stay under 354 per month.
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# 8
Goleo
Old 16-02-2011, 12:07 PM
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I haven't told her it is going up yet! In don't think there will be a problem in doing so either - she knows she is on 'mates rates' at the moment. The house is close to Stockport. We don't have sky (too busy to watch too much tv!), but we have a dishwasher, internet etc. I will add in the bills to whatever i decide on so it is an all inclusive monthly rent. I would just like to be getting what the rooms is worth (i.e. if I wasn't renting to a friend) without charging over the odds. I've been having a look on gumtree (thanks for that tip!) i think if i put it up to 300 that should be reasonable.
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# 9
Nashie83
Old 16-02-2011, 1:21 PM
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She may assume she gets to stay on 'mate's rates' given she will still (I assume!) be your mate?? Job or otherwise...
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# 10
poppysarah
Old 16-02-2011, 1:25 PM
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I'd check your insurance too - and perhaps use that as the reason for upping the price...
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# 11
Goleo
Old 16-02-2011, 1:38 PM
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Well she would have assumed wrong! Haha! Really though she knew it would go up eventually as when she moved in she had a month free from rent and then she was temping on rubbish pay, but i still put it up to 200, now she has a proper job (and probably earns more than me - she certainly can afford to buy more clothes and wine than i can!) she should know it will be going up again. I'm not worried about telling her, if she wants to move out she can. We would still be friends and i would be glad of the space and my spare room back for visitors.
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# 12
westlondonbuyer
Old 17-02-2011, 10:17 AM
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I'd advise you to think again about offering an 'all inclusive price'. It can sometimes encourage lodgers to be thoughtless with their use of electricity/heating (because their 'share' of the bills don't go up, but yours do). It also puts you at the mercy of price rises from utility suppliers - you can't be changing the rent and therefore the contract you have with your lodger every time your bills go up.

You must let your insurers and your mortgage company know you have a lodger; encourage her to take out her own insurance too as her possession won't be covered by yours unless she is immediate family.
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# 13
mr_rush
Old 17-02-2011, 10:34 AM
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why don't you look on gumtree or rightmove to work out market rent.

when I was living with a friend who was also a lodger I charged 10-15% below market value.
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