Finding ways to stretch your income and maximise your cash is a challenge many of us face. And while budgeting effectively is key, there are times when earning extra cash is necessary.
And one way to do so is to get your home making money for you, by renting out your spare room.
Sharing your home with a stranger isn’t for everybody. When it works however, it can see homeowners offset some of the costs of running their property, provide someone to take care of the house when the owner is away and even be a way to make new friends.
If you are keen to dip your toe into the world of being a landlord, be clear on what you are unwilling to compromise on and communicate these non-negotiables clearly to your tenant.
Non-negotiables could include pets, smoking in the house and even schedules, for example if you work nights and sleep during the day, it may be best to avoid someone who is home most of the day as this will likely lead to conflict.
If you think letting out a room could be for you, check out our handy tips…
However you choose to promote your room, be sure to take plenty of good quality photographs so prospective tenants can see what the room is like in advance and to appeal to the most amount of people.
When doing your sums bear in mind the government’s rent-a-room scheme which allows homeowners to earn up to £7,500 from letting out a furnished room, tax-free. If your home is in joint names, you will each be able to earn £3,750.
Once opted-in, the exemption will be automatically applied to your tax code, though if you earn over the threshold you will be required to complete a tax return.
If considering renting out a room in your home for the first time, it may be beneficial to start with a short-term lease. This way you can establish whether letting a room is for you, knowing that if it isn’t, it is only for a short time.