Renting out your room

If you have a spare room or even sofa, at home you CAN make money from it

People in the UK are making an average of £446 a month from renting out a spare room

Tell your insurance company what you are doing as it may affect your cover or any claims

Renting out your personal space can be intrusive so think carefully before you do it and always carry out security checks

 

Need to know

  • Make sure to let your insurance company know that you are renting our your room. If you don’t tell them and then need to claim, it could be rejected
  • Your contents insurance doesn’t normally cover the belongings of lodgers so it is important to make sure they know this before they move in
  • There will always be an element of risk in letting strangers into your home but apply some common sense and never be afraid to ask lots of questions
  • ALWAYS GET REFERENCES, SPEAK TO AT LEAST 2 PREVIOUS LANDLORDS. CHECK OUT EMPLOYMENT DETAILS
  • You can do a basic screening with Tenant Screening which covers ID and credit history in just 2 hours for £9.95, or a full reference check is £19.95 and should take just 48 hours
 

The tax Bit

  • The Government’s Rent a Room scheme allows you to earn up to £4,250 of rental income tax free (around £350 a month) without having to register with the tax authorities
  • If you are lucky enough to earn more than £4,250 from renting a room then you will need to register with HMRC (the tax man)
  • Registration is REALLY easy - don't be put off by this hurdle. Call 0300 200 3300 and someone will talk you through the process (it can take a while to get through!! but they are very helpful so worth the wait) or register online
  • If you have no other income at all then you can earn up to £14,250 tax free (including the income tax free allowance of £10,000)
  • Once you have registered with HMRC you need to keep a record of your rental income. You will be sent a self assessment form to fill out and you will add this amount to the rental income box. It's really easy
  • Remember you will need to pay tax in the end if you earn more than the tax free amount. You should budget 20% of your rental income unless the income takes you into the 40% tax bracket, then you should budget 40%
  • You will not pay any National Insurance on this income
  • You can't offset any expenses against this income under the Rent a Room scheme. If you have a lot of expenses then consider staying out of the Rent a Room scheme
 

Rent out a room (short term)

Airbnb


Why we like it:

  • free to list
  • free professional photography
  • secure payments
  • pre-screening
  • global
  • can make £100s a week

Watch out:

  • you pay airbnb 3% of what you make
  • you need to set your own terms up front

Wimdu


Why we like it:

  • free to list
  • free professional photography
  • secure payments
  • pre-screening
  • global
  • can make £100s a week
  • able to give and earn reviews

Watch out:

  • you pay Wimdu 3% of what you make
  • you need to set your own terms up front
  • you need to do a bit of research to decide on your tariff

Rent out a room (long term)

EasyRoommate


Why we like it:

  • allows you to choose your flatmate from personal profiles
  • easy to use site
  • has 60,000 tenants listed, over a million visits a month
  • basic listing is free
  • great if you live in a university town

Watch out:

  • focused around cities rather than towns
  • more suited to finding a lodger/flatmate rather than a shorter arrangement

Spareroom


Why we like it:

  • free to run basic ad
  • easy to use
  • 3,818,604 registered users
  • you can specify just Monday to Friday
  • email alerts for new room seekers in your area
  • free customer service support

Watch out:

  • the bold ads are £9.99 a week and get most clicks

GumTree


Why we like it:

  • UK’s number 1 classifieds site so good chance of your ad being read
  • quick registration
  • free basic listing
  • loads of advice on how to list

Watch out:

  • upgraded ads are more effective but cost from £12.95 up to £43.95
  • there is no pre-vetting process of potential lodgers

The inside track

  • You can register your room with as many companies as you like so don’t feel like you need to stick with one site!
  • Maybe try doing a short term let first to make sure you are happy with the adjustments (and possible compromise) to your lifestyle
  • Not only can you make money, but you’ll end up meeting LOADS of new people too!
 
 

Biggest Savers

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