How To Make Extra Cash Renting Out An Unused Room
The good news is that there are plenty of people looking for a room to rent. Provided you can set rules that both parties are happy with, you can enjoy a good relationship with the tenant whilst earning some extra money.
Many people have an extra room in their home that is either unused or perhaps full of items you can’t decide if you want to keep or not. However, this space is a great way to earn a little extra cash by letting the room to a lodger.
In this article, you can learn more about renting an unused room and some tips to help navigate the process.
Is Renting A Room Popular?
According to the Office of National Statistics (ONS), there are an estimated 18.6 million unused rooms in the UK. The number of people renting a room is steadily rising. This year could see figures rise further as people look to secure additional income if they are not able to work due to the pandemic.
Weekly Renting
If you live in a city such as London, you may offer the option of only renting from Monday to Friday. There are many people that may need to stay in London for work during the week, then return home for the weekend. This is a better arrangement for some people as you get the benefit of earning rent and knowing each weekend you can have the house to yourself.
What Should The Lodger Get?
The person renting the room should only have to pay one amount, the rent. Included in that should be all bills such as water, electric, gas, and council tax. As part of the agreement, you may also include internet, cable TV, or other services. All of this should be discussed and agreed before you rent the room.
It is also important to have a written agreement with the lodger. This will not only confirm their responsibilities but yours also. The agreement should cover the lodger’s rights while in the house such as access to common areas like the sitting room or kitchen. For example, confirming times they may not be permitted to use the sitting room.
Things To Consider
There are a few things to consider before you rent a room as they may impact your household finances.
Tax. You can earn up to £7,500 from renting out a room before you must pay tax. Remember to declare everything correctly to avoid penalties from the taxman. Council tax. If you are currently receiving a council tax discount for being a single resident, you will lose this if you get a lodger. Insurance. Some home insurance policies don’t permit lodgers. Check with your insurer first as you may need to switch insurer or pay more on your existing policy. Legal extras. Renting a room means there are certain regulations you must follow. This includes having all electrical appliances checked, making sure the home complies with fire regulations and ensuring the boiler is serviced once a year by a CORGI registered engineer.
How Much Could You Earn?
Rent varies wildly depending on where the property is. In London, the average rent for a room is £745, in the rest of the UK, the average is £535. Over a year you could earn £8940 in London or £6420 outside of London. Remember, this is an average so your exact location could mean that you earn more or less than these figures.
Source: https://www.propertywire.com/news/uk/cost-of-renting-a-room-in-uk-up-by-11-year-on-year-latest- index-shows/
Next Steps
Now that you know the basics of renting out a room, you just need to advertise and start earning extra cash today!
Written by: am1908