If you have a spare room in your home, you may be tempted to rent it out to a lodger. This can offer home owners numerous perks, including the opportunity to earn some extra cash – up to £7,500 tax-free. This could be used to make extra payments towards your mortgage or to boost your income.
While taking in a lodger requires a lot of deliberation, if you have decided you would like to rent out your spare room, here are some tips to help you prepare.
Upgrade Your Spare Room
The room you intend to let may currently be an unused study, decorated as a children’s bedroom, or perhaps a junk space. This may mean carrying out upgrades to ensure the room is tenant-ready. This work could include anything from new furniture and a fresh coat of paint, to making sure all the fixtures and fittings are safe.
Record the Inventory
Depending on your preference, you can choose between letting the room unfurnished or furnished. No matter which you select, it is advisable to create an inventory, cataloguing the décor, each item and its condition. This will provide proof of damage, should this be required further down the line – for example, in a dispute over the deposit.
Inform Mortgage, Insurance and Council
When deciding to take in a lodger, you must also inform your mortgage provider, insurance company and the council about your new living arrangements. This will prevent you breaching the terms of your mortgage, allow you to update your insurance policy and update your council tax – if you currently live alone, you will no longer be entitled to a single person rate.
Check Tenants and Decide on Terms
When inviting anyone to stay in your home, it is essential that you carry out background checks to find out about their history. For example, getting a reference from their most recent landlord or employer could be useful. After all, you need to know that your lodger will be dependable and pay the rent on time.
Define Your Expectations
In addition to requiring a deposit and asking your lodger to sign a contract, it may be a good idea to set some ground rules. Remember, this is still your home, so you need to be happy with a tenant in situ. Before they move in, find out if you are compatible. For example, if you like to go to bed and get up early, you may not want to live with a night owl.
Taking in a lodger can offer financial benefits and as such, can be an appealing option. Consider these tips to help you rent out a room in your home.