Jasmine Birtles
Your location should give you an idea of the kinds of people who may be interested in renting your room.
Are you close to a university or college? You could provide accommodation for students who are living away from home.
Do you live close to an airport? Cabin crew are frequent lodgers as they often move away from home to do their dream job and need somewhere close by to rest their head when they are not travelling.
If you live in a city or within close proximity to train stations and other good transport links, your property is likely to attract interest from young city workers and commuters.
Commuter:
• Like a professional but may be away at weekends
Whoever you decide to choose, make sure they fit into your current lifestyle.
This should really be easy enough – and probably won’t cost you much.
Firstly, if you live near to a university, college or other institute, ask if you can put some notices around campus.
Students:
• Have low expectations in terms of luxury
• Can be messy / noisy
• More likely to take a temporary tenancy e.g. one term / semester
Professional:
• Expect comfort, cleanliness and maybe even luxury
• More likely to be reliable in terms of cleanliness and payment
Secondly, use sites like Gumtree, Spareroom, mondaytofriday and EasyRoommate to advertise for free. Failing these, you could advertise in your local newspaper or put an ad in your newsagent’s window, although both of these will cost you a small fee.
Unless you manage to rent your room out to a friend or acquaintance, you are ultimately inviting a perfect stranger into your home to live with you.
Unless you have no qualms about the type of person you have live with you, you may want to think about asking potential tenants for some references before you give them the keys.
Ask for and check at least two references. These will ideally be previous landlords and workplace references.
Take the time to call them up instead of sending them an email. You’ll be able to get an idea of their authenticity a lot easier if you actually hear their voice.
For previous landlords, you may want to ask some of the following questions:
•What was their address? (use this to check that the reference is actually who they say they are – they should be able to answer pretty quickly).
•Did they pay their rent on time?
•Did you receive any complaints from neighbours?
•Were you happy with the way they looked after the house?
•Would you rent to this lodger again? For workplace references, you may want to ask some of the below questions –
•When did they start working for you?
•What is their position?
•What sort of hours do they work?
•Are they full or part time?
•Do they get paid on a weekly or monthly basis?
The answers to these questions will firstly ensure that the potential lodger is telling you the truth and secondly ensure that their rent will be met.
When selecting a possible tenant, check the following:
• Tenant ID, this can be a bank statement or passport
• Ask for a credit/bank check, this will put people off who do not pay debts on time
• Also ask for proof of occupation (letter from employer, letter from university/ school etc.)
When you have found a good tenant you should both sign a tenancy agreement that would include the following:
• The monthly rent and the date on which it is transferred
• The proportion of specific bills for which the tenant is responsible (gas, electricity, water, telephone, TV)
• An inventory of what is in the room and what state of repair it all has before the tenant moves in
• The period of tenancy and the cancellation period
• A formal arrangement that regulates the cleaning jobs that have to be undertaken by the tenant (kitchen, bathroom etc.)
• A list of all appliances that may be used by the tenant (vacuum cleaner, kitchen utensils, washing machine etc.)
• A clause addressing issues such as overnight guests, pets and idle periods
Template agreements can be found here
•www.makeurmove.co.uk (free, but only for an entire house)
• www.rla.org.uk/ (with costs, a 12 months membership for £75 is required to have access to it)
• www.landlordzone.co.uk (offers a variety of different downloadable documents, with costs)
For more advice you can approach your local council and/or the tenant/landlord association as well as estate agents.
The Rent a Room Scheme lets you earn up to a threshold of £4,250 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
Renting out a room will bring in extra income. It will be tax free if it does not exceed the “rent a room allowance” of £4,250 per tax year. Any more than that and you will be taxed at your normal tax rate.
To avoid this declare the income and its related expenses as normal property rental and therefore claim mortgage interest, share of bills, etc.
This may prove to be difficult so ask your accountant for advice.
For more advice you can also visit the Gov.uk website.
If you are providing a ready furnished room, you will want the contents protected under the house insurance should anything happen to them through theft or fire.
The first thing you need to do to ensure your belongings are covered, is to give an accurate estimation of what they are actually worth. What you don’t want to do is underestimate the value of your belongings just to get lower premiums. If you do this and make a claim, insurers may only pay out a fraction of what your damaged possessions were actually worth – so you’ll lose out in the end.
There are ways in which you can lower the cost of your premiums such as installing fire alarms. Find out more ways to cut the price of your home insurance by comparing policies with our home insurance comparison pages
For more information on renting out your home, here are some useful articles you might be interested in reading:
•Hosting foreign students
•Buying property to make a profit
•Make and save money from renting
•Rent a room for tax-free cash
•Make money renting out your driveway or garage
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