Earn money by renting out a room (2024)

So many people complain about the costs of their home (be it mortgage or rent). If you have a spare room or two in your house you areessentially allowing the value of theproperty to go to waste so it might be a good idea to consider getting a lodger. It is arelatively easy and verytaxefficient option to raise some extra funds. With websites like easyroomate it has never been easier to get a lodger and earn some extra cash.

The UK government currently has a "rent a room" scheme which means you can earn up to £4250 a year from rent tax free. * This is now £7,500 tax free earning from renting a room*.
All you needto do is to opt into the scheme when you fill out your tax return. This means you have the chance to have a tax free side hustle. Though forthis scheme to apply you must provide a furnished room. It is important to note that you must inform you mortgage provider (though they are usually fine with you having a lodger) and if your a tenant (private and localauthority) check your contract and notify your landlord.

What to consider when taking on a lodger:

Who the lodger is.
It is often best to pick someone who you already know, no matter how slightly (it could be just a friend of a friend). This is because a lodger isgenerally going to act better is there is something else to loosebeyond just annoying the landlord. If youdon't know anyone in need consider opting for anorganisation to chose thelodger for example I know many university students who have used easyroomatewith much success. However, regardless of how you find your lodger all ways meet up with them before you allow them to move in and if possible talk to former landlords or housemates.

- Will you provide meals / cleaning services.
You may wish to include (and charge for these services),though be aware that this may make a lot more work for you. With regards to meals be sure that the lodger is willing to work with your meal times. Theadvantage as a landlord is that it prevents your lodger gaining a tenancy and reduces the legal rights that they have.

How much rent will you charge
It can be hard to know what is a fair market price, I would recommend looking at sites such as easyroomate to give you an idea of how much rooms are being listed for in your area. By doing this you are able to staycompetitive in yourpricing. Remember to review you pricing every year or so to ensure you are still charging market rent.

Will rent be inclusive of bills.
This can be a tricky one as its hard to know what a lodgersconsumption is which means you could be left short if you include bills. However, the advantage of bill included is youdon't have to go chasing the lodger when bills are due especially if they are annual/bi-annual and the lodger has moved out by that time.

Set out some house rules.
At the end of the day it is still your home and your rules apply. Try not to be dictatorial, but some rules are okay.
Thinkabout things such as:
- energy saving (i.e.turn lights off when not in room)
- reasonablecurfew (i.e notcoming back at 4am and waking everyone up)
- Is the lodger allowed friends over if so how often and until what time

Draft up a list of house rules when the lodger moves in and discuss themwith the lodger on the move in day, giving them the opportunity for discussion. A two way conversation will lead to a much better dynamic between you and your lodger.

If you are looking for a lodger easyroomate.co.uk is a great website and is the UK's number one roommate site. Best of all it is FREE to advertise your room meaning more money for you.

Have you ever taken on a lodger? What was your experience like?

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