Renting from private landlord via Gumtree

FreeBear

SlovakianGuy wrote: »

I'm sick of messy or noisy housemates, so now I'm thinking exactly about this. Renting a whole property myself and take in lodger or lodgers that I choose myself. I'm tidy and very very quiet, and that way I would be able to choose like-minded people to live with, and possibly even save some money, depending on how much I would be paying to the landlord and how much they would be paying to me.

You can earn up to £7,500 per year under the Rent a Room scheme before having to pay tax - Unless you have to do an annual tax return, you don't even have to inform HMRC about it. You do need to be careful about the number of extra lodgers though. With recent changes to the rules, it is all too easy to find yourself being classed as an HMO.

Finding lodgers isn't that difficult - You could get one that seems to be nice as pie to start with, and then turns in to the monster from hell. So do your checks first and ask loads of questions.

SlovakianGuy

FreeBear wrote: »

You can earn up to £7,500 per year under the Rent a Room scheme before having to pay tax - Unless you have to do an annual tax return, you don't even have to inform HMRC about it. You do need to be careful about the number of extra lodgers though. With recent changes to the rules, it is all too easy to find yourself being classed as an HMO.

Finding lodgers isn't that difficult - You could get one that seems to be nice as pie to start with, and then turns in to the monster from hell. So do your checks first and ask loads of questions.

Thank you But what exactly is considered an earning in this case? Is it any money that I get from my lodgers?
Let's say I have rented a property as a single individual and then took in 2 lodgers. I pay my landlord £700 for rent every month myself and receive £600 from my two lodgers. Over 12 months I will pay £8400 to my landlord and receive £7200 from my lodgers. So, that £7200 is considered my earning?
Also, does it make any difference if lodgers have all bills included in their rent or pay them separately?

Regarding HMO, I just checked Leicester City Council website and it says you need the licence if there are 5 or more tenants living in the property (who are not family, etc.).

Yeah, lodgers, I was looking on SpareRoom few weeks ago and there were some ads, mostly pretty young women that had almost identical text with other similar ads. I wonder what kind of scam this might be? Maybe the SpareRoom itself, so you have to pay them for Early Bird access if you want to contact those girls? Of course that's just my surmise.

keatergreyhound

I dont know if im allowed to do ths but all less than around a mile away-
https://www.rightmove.co.uk/property-to-rent/property-67804894.html Smashing area catchment area to a fantastic local school and four bed


https://www.rightmove.co.uk/property-to-rent/property-76396766.html Further away


If the choice was mine id be with the four bed. All within 5 minutes walk of a vets, chemist, supermarket, great transport links, library and nice area. Great schools also. Youd easily be able to find a house mate for that area.



Is The Eyres Monsell an area you are set on? if not try Aylestone, Knighton and Welford Road area

saajan_12

SlovakianGuy wrote: »

Thank you But what exactly is considered an earning in this case? Is it any money that I get from my lodgers? - yes
Let's say I have rented a property as a single individual and then took in 2 lodgers. I pay my landlord £700 for rent every month myself - would you be able to show the LL you earn enough to cover £700 per month? You wouldn't have the lodger income from there yet, and there's no guarantee you'll find them. and receive £600 from my two lodgers. Over 12 months I will pay £8400 to my landlord and receive £7200 from my lodgers. So, that £7200 is considered my earning? - yes. The full £7.2k is income, you cannot deduct expenses eg your rent / bills if you use the Rent A Room Scheme to get £7.5k income free of tax.
Also, does it make any difference if lodgers have all bills included in their rent or pay them separately? - The total benefit you receive in £ rent or contribution to bills is all considered part of your income under RAR. You can't exclude an amount for bills in your calculation, or have them pay a bill directly,, it would all be counted.

Regarding HMO, I just checked Leicester City Council website and it says you need the licence if there are 5 or more tenants living in the property (who are not family, etc.). - this might make the LL not want you to have any / too many lodgers.. it could open him up to HMO rules.

Yeah, lodgers, I was looking on SpareRoom few weeks ago and there were some ads, mostly pretty young women that had almost identical text with other similar ads. I wonder what kind of scam this might be? Maybe the SpareRoom itself, so you have to pay them for Early Bird access if you want to contact those girls? Of course that's just my surmise.

Your main issue will be convincing an LL to let to you based on your income. You won't have the lodger income yet and can't guarantee you'll find people willing to pay that level, without void etc. Paying upfront will help, but if you can't demonstrate some on going affordability at least, then most LLs would be worried they'd have to evict + void etc after a year or two.

FreeBear

SlovakianGuy wrote: »

Over 12 months I will pay £8400 to my landlord and receive £7200 from my lodgers. So, that £7200 is considered my earning?

Regarding HMO, I just checked Leicester City Council website and it says you need the licence if there are 5 or more tenants living in the property (who are not family, etc.).

Yeah, lodgers, I was looking on SpareRoom few weeks ago and there were some ads, mostly pretty young women that had almost identical text with other similar ads. I wonder what kind of scam this might be?

As far as HMRC is concerned, any & all money you receive is classed as "earnings". So yes, in your scenario, £7,200 would be income (or earnings). If you separated out bills and charged them as an extra, any money received would also be classed as "income" and could take you over the £7,500 threashold under the Rent a Room scheme.

As for HMO definitions, from https://www.gov.uk/private-renting/houses-in-multiple-occupation

Your home is a house in multiple occupation (HMO) if both of the following apply:

• at least 3 tenants live there, forming more than 1 household
• you share toilet, bathroom or kitchen facilities with other tenants

Your home is a large HMO if both of the following apply:

• at least 5 tenants live there, forming more than 1 household
• you share toilet, bathroom or kitchen facilities with other tenants

Based on the above, a pair of lodgers living as a couple, you wouldn't be a HM (BUT renting the property yourself would complicate matters). Two separate unrelated lodgers, and you would be a small HMO - New rules came in to effect in October (as I recall), so it is an area you need to tread carefully.

As for spareroom - It is a site I've used, and whilst there is always a risk of scams, the team behind the site actively police the adverts. I've had one taken down myself for breaching their rules (no, it wasn't a scam ad). The site owners need to make money somehow, so charging a small fee for premium listings is fair. It enables people to make contact within the first seven days (the early bird period) which may be an advantage in a popular area.
If you suspect a scam, report the advert to the site team.

SlovakianGuy

Yes, I can rent a house via agency, but I doubt any agency would allow subletting. What do you think?
I've got enough savings for deposit + I would be able to pay rent in advance, let's say for 6 months. My friend (a couple with a small kid) had problem to rent a flat because they both have poor credit score, so they borrowed money from me (luckily, already repaid ) to pay for 6 months upfront. Only then the agency agreed to rent the flat to them. So I thought maybe I could do it the same, pay in advance. Subletting still would be a problem though.

Slithery

SlovakianGuy wrote: »

Yes, I can rent a house via agency, but I doubt any agency would allow subletting. What do you think?

I think that it's nothing to do with the agency. It's up to the landlord what you can and can't do - just like in every tenancy.

SlovakianGuy

Slithery wrote: »

I think that it's nothing to do with the agency. It's up to the landlord what you can and can't do - just like in every tenancy.

I'm not sure about that.
Agencies in their adverts often state something like "£150 + VAT per person and £50 + VAT for each additional tenant".
If I'm correct, in this case, even if I rented the whole property myself, every additional tenant would have to sign an agreement with the agency, right? And they would be still tenants, not my lodgers.

hazyjo

You're getting confused.


If you rent a room to someone, they will be your lodger. Not an additional tenant. Be very careful not to mix those two words up - especially to the lodger themselves and to the LL.