Renting out a spare room

ThriftyWanabee

Just wanted to ask if anyone has made money from renting out a spare room in their home? We have a spare bedroom and I wondered what would be the best way to go about renting it out, whether people think it's worth the hassle etc

Would be good to hear other people's thoughts or get advice from anyone who has tried this. Thanks.

**ThEChAllEnGeR**

Gumtree are a good free way of advertising. I quickly learnt the hard way that bad, unclean, smelly tennants can be a nightmare, so don't be afraid to be ruthless and very picky in your selection. Asking the potential tennants lots of questions can help in making these judgements. Landlords are now expected to hold deposits with an external organisation. I would usually get around this by charging double for the first months rent, then returning half of this double rent if there is no damage or costs from missed rent etc. It is essentially a deposit in all but name but it enables you to get around the hassle and costs of a deposit scheme. Don't forget about £4500 can be earned tax free from "rent a room". If your earnings are more than this, it might be more worthwhile to claim your costs (ie mortgage interest, insurance, maintenance costs etc) against your income, as your tax bill may be lower doing it this way.

apositivethinkingcat

I've had some good and bad lodgers... mainly students. Use one of the deposit holding schemes (you have to legally anyway). Make sure you get a really good contract (you can buy ones online or in Smiths etc). Interview them. Set ground rules politely but firmly. Over-estimate what bills cost or the lodger will leave every light one and tap running as they see it as 'free'. Or (more effort) make them pay their share each month of bills on top of their rent.

Someone also pointed out that city locations can easily get midweek lodgers for people who commute - ensures older, more sensible lodgers and gets your weekend privacy. Less rent, but potentially the best of both worlds

When you figure out your income - remember that (unless they pay bills seperately) only the proportion of the rent that is rent and not towards bills counts as part of the amount to earn before tax.

Also - ensure you can kick them out in a week if they break serious rules etc in the paperwork - it is your home!

the-mango

apositivethinkingcat wrote: »

I've had some good and bad lodgers... mainly students. Use one of the deposit holding schemes (you have to legally anyway). no you don't if you're a resident landlord Make sure you get a really good contract (you can buy ones online or in Smiths etc). Interview them. Set ground rules politely but firmly. Over-estimate what bills cost or the lodger will leave every light one and tap running as they see it as 'free'. Or (more effort) make them pay their share each month of bills on top of their rent.

Someone also pointed out that city locations can easily get midweek lodgers for people who commute - ensures older, more sensible lodgers and gets your weekend privacy. Less rent, but potentially the best of both worlds

When you figure out your income - remember that (unless they pay bills seperately) only the proportion of the rent that is rent and not towards bills counts as part of the amount to earn before ta

Also have a look into the rent a room scheme which gives you a tax free allowance each year http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804



if you search around on the house buying renting and selling forum too you will find tons of information on lodgers and things you might find useful

lvm

It's definitely a great idea. I've done it for last year and a half and make an extra £4200 a year from doing this.

And ignore first 2 replies saying you have to hold deposits in a scheme...that's only for rental properties.

Use your gut instinct as well as your head when picking people...my first lodger I went with coz I just wanted the cash and he was a nightmare! My current tenant is awesome...I haven't taken a deposit as he wouldn't have been able to move in otherwise but I'd rather have someone I could get on with than someone I couldn't stand and have a deposit from them. And of course I'd never recommend not taking a deposit but I'm well aware of the consequences.

Gumtree is a good place to start...if you'd rather take it slowly just read through the Wanted ads and contact people yourself rather than posting your own ad.

Also...if you wanted to ease yourself in gently and are in a good area then try out airbandb.com

Good luck!

weanie

I have a cousin who uses spareroom.com to search for tenants and also to advertise her room. It is a free to use service unless you wish an upgrade of ad.
She has had a variety of tales to tell but overall, she is happy to keep on using up her 'rent a room' tax allowance of £4,200 each year. I agree with the previous post and confimr that you do not need to secure the deposit with any scheme as this is designed for the rental of property - much different to a room in your house.
good luck.

vics199

Hi, I have been taking in lodgers for the last 18 months and use spareroom.co.uk . I am on my 3rd lodger now and yes there are ups and downs. If I didn't need the money then I definitely wouldn't do it. One of my lodgers was fab but then he bought a house after 6 months. The other 2 have been a bit of a nightmare and I had to kick the first one out as we just couldn't get on.

The things I have learnt though are to set rules when they first move in and make sure you bring it up with them if any are broken. Also be picky when they come round to view - don't just pick the first person.

I include bills in the rent because it is far easier but if i have issues with how much electric is being used etc I make a point of telling them about turning lights off etc.

And last of all, try and get somebody who has been out of university for a few years else they try to live the student life in your home!

iainm

We have been using airbnb recently and that has gone quite well. Can you get any deductions against tax with that? (it's a B&B service)

fluffpot

Are you paying tax on the income?
running a 'b and b' in your home as second income comes under the govt rent a room scheme so you can earn up to the tax allowance tax free

I suspect that to offset tax you'd have to set up as a business for b and b..