Put your empty rooms to good use, rent out space in your home for extra income. There are lots of people who are looking for a hassle-free rented accommodation, such as students visiting from overseas or professionals starting a job in a new area. Rising demand and a shortage of space in busy cities can make your spare room a hot commodity.
If your home is in a desirable area, you have spare rooms and you’re willing to share your space, renting out a room could be an excellent way to boost your bank balance.
Making the most of your spare room
There’s something about the idea of bed and board that sounds slightly old fashioned, but you might be surprised to realise just how high the demand is for rooms today. Rising rental prices and housing shortages make renting a single spare room a great way for someone to get a start in an expensive area or relocate for work. Channel 4 has put together a nice information package about renting out your spare room, ranging from the potential profits to the logistics of welcoming someone into your home.
Renting out your spare room can earn you some extra cash, but you’ll need to keep an eye on how much you make. If you’re earnings from the rental are less than £4,250 a year, you’ll be able to keep all of the money tax-free. If your household makes more than this by renting, you’ll need to pay tax on your earnings. You can opt into the self assessment tax scheme to pay your tax relatively quickly and easily every year and keep yourself on the right side of the tax man. Find out more about the rent-a-room scheme from the government website. There’s also some great advice on how the scheme might work for you available from the Money Advice Service.
Simple rules for renting
Once you’ve decided to take the plunge and rent out your room, you’ll want to get to work making sure your home is an attractive prospect. You may need to invest a small amount of money in redecorating your spare bedroom and you’ll want to make sure you can offer some of the amenities people are looking for, such as a Wi Fi connection. MSN Money has put together some handy tips for making sure your home is an attractive prospect for renters.
Next, it’s time to start looking for your tenants. Advertise online and in local papers and choose a day for showing prospective renters around. Try and look for someone who seems like they have the kind of personality that will fit in well with yours. When you find someone, you should also always make sure you draw up a written rental agreement, so that you both know where you stand. For an interesting, in depth guide to things to do before renting, have a look at the Guardian’s rental tips. Let’s Save Some Money has also put together a great one minute guide to renting a room, perfect for giving you a peek at the big picture.
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