If you have a spare room, then renting it out could bring you £7500 of rent before you start paying tax!
That’s a fab amount of money! Yay!
But, I hear you ask…
How do I get started?
What do I need to know?
What do lodgers even need?
What do I need to be aware of in terms of my rights and my house mate’s?
All these questions to consider – ok let’s get started!
A Bit of Background to My Experiences of having Lodgers/ House sharing
- In total I had 5 lodgers
- I had more than one house mate at once.
It saved me absolute bomb on my mortgage at the time!
Quick Price Example
I had two lodgers at one point in time:
OMG – £6600 TAX FREE per year! Without really doing all that much – just being open to sharing your house!
Ok, so now you’re thinking:
What do I need to do to get a roomie?
Here are my top tips to think about, when preparing to earn a fortune from a house share:
- When advertising your spare room, take clear photographs and use neutral colours.
- Insist on 2 references – one from a workplace and one personal reference.
- Always insist on a month’s rent in advance and also a bond.
- Draw up a lodger contract and save two signed copies – one for your records and one for your lodger to keep.
- Stay Safe and treat the interview like a job interview.
- Advertise for professionals (people who have a stable job)
Pin me for later!
When advertising for a house mate, make your listing stand out from the rest.
- Make the room neutral colours and take a few good quality photos of the room also. Look at descriptions suggested by the particular website – this is where I started out. Both spare rooms I had were always repainted if the walls showed wear and tear.
Provide sturdy but cheap furniture in your spare room. Ikea is amazing for this because the furniture replaceable and cheap but also amazingly durable for the price you pay.
Shopping List Example
You possibly have the bed already, but here are other things you might want to purchase, before you list the room.
- Wardrobe with hanging space
- Bedside table
- Bedside lamp
- Chest of drawers
- Blind of curtains
Here is a shopping basket example from Ikea, as an example.
When renting out your spare room, always made sure the bed has a mattress protector, and change it every time there is a change of lodger. You can provide extras like bedding, but mostly people already have this.
- You need to make sure that the room has adequate ventilation and that the person has privacy, so install a good blind or drapes, or both.
As you can see, you will need approximately £300 to set up the room for your new lodger.
A bed will probably set you back between £200 and £300,so budget this in. Again. Ikea is superb for this.
Advertise on 3 different websites, to widen your reach
Here are some website ideas for you, to find your ideal house share :
Spareroom is fab – I always landed a housemate so quickly from this site.
Specific to London and for flat sharing –Moveflat
Insist on 2 references – one from a workplace and one personal reference.
I always insisted on 2 references that I could check out, before I agreed on any rental arrangement. This gives you the added reassurance that the rent will be, in theory, paid every month. Also, it gives you a more clear insight into the character of the person you are inviting into your home.
I always insisted that the person was working – harsh, but I wanted the reassurance of knowing that every month I would be paid.
Always insist on a month’s rent in advance and also a bond.
Ok, so what is a bond when you set up a house share?
A bond is an amount of money that you ask for, on top of the rent, that stays in your keeping, just in case there is damage to the room or house.
If there is no damage when your house mate leaves, then they are entitled to this money returning to them.
I used to ask for £200 regardless of rent charged, as it would give me enough cash to do a basic DIY job on their room if they damaged any fixtures or fittings.
One lovely lodger I had came with two cats, which I was fine with, but I charged her a non-refundable £150 deposit for cleaning costs of her room, and also to cover any cat damage to soft furnishings or woodwork.
Draw up a lodger contract and save two signed copies – one for your records and one for your lodger to keep.
When planning your flat share, this is an absolute MUST. It gives you the security of having in writing what has been agreed, and also house rules.
Things to include in your lodger contract:
- Rent charged every month.
- Date rent is due every month.
- Bond paid
- Damages stated that result in the bond not being repaid.
- Details of non-refundable bond.
- House rules
Also, there are very simple lodger contracts available that you can customise and adapt to suit your house rules. Fortunately, I never needed the paper, but if we’d have had a dispute, this would have come in useful to prove my case.
Further Important Legal Information You Need to Check Out
Yawn, but you need to read all this. There is also further information on this over at gov.uk – you need to opt in to the Rent a Room Scheme. Find information through the link. You will also need to do a self assessment tax return every year.
When interviewing a person of the other sex, ensure if you a woman, that another friend is around.
One of my friends stayed with me, and I explained this to the person I was interviewing.
Remember you do not know the person yet, so your safety is the most important thing.
Other Top Tips for Interviews
- Arrange for your friend to call you, at a time when the interview should be finished.
- Treat the first meeting with this new person like a job interview. If you were interviewing a person, with the view to hiring them, you would want to know as much as possible about them before committing to hiring them.
- Interview 2 or 3 potential lodgers before choosing who you think is the best fit, who you are most comfortable around and who will pay on time. Don’t be afraid to be choosy.
- Don’t jump too quickly – reflect on what you have seen. Yes, the money is attractive, but this potentially could be a long term change of your lifestyle, so take time over your decision.
To conclude, I hope this has answered some of your questions about making thousands on taking in a lodger, house mate or sharing your flat with another person.
Overall, although having a lodger seems daunting, it opened up new friendships for me at the time. It also gave me companionship in an empty house, and over paid my mortgage! Win all the way!
Could this be you?
Can you imagine being able to do this?
Overpaying your mortgage?
Paying your debts off quickly?
Saving an emergency fund?
As always feel free to add to this with your experiences of lodgers, so that other people can weigh it up as a money enhancing option.
How has your experience of lodgers been?
Would you recommend it?
Any questions just go ahead and ask.