If you do not mind sharing your home, taking in a lodger is an easy way to make some extra cash. One million home owners are currently renting out a spare room, making an average of £182 a month in rent. One in 10 homeowners now have a lodger in their home. These 'Rent a Room' entrepreneurs collect more than £3.9 billion a year in rental payments - according to a leading mortgage provider.
This entrepreneurial flair is borne of the economic storm we are all endeavouring to survive and shows true spirit. By renting out a room you can earn enough to make your money last until the end of the month and take some of the pressure off. Homeowners in the south pocket the highest rental income from their spare rooms, with one in seven in the south west and one in ten in the south east renting out a room. People living in the east Midlands (4%) are clearly less likely to welcome a stranger into their homes. However, anyone who has a mortgage on their property must check first with their mortgage provider to ensure they are not breaching their terms and conditions.
Some mortgage companies exclude lodgers in their terms whilst others may insist you have a tenancy agreement in place. You must also tell your insurer that you are renting out a room and make sure you obtain good, sensible advice because in essence, you are becoming a landlord. Westhill Insurance Services have a great deal of experience in this sector and will provide you with professional, accurate and sensible advice – as an independent insurance broker they will be able to find you the best possible policy at the kindest price for your pocket.
You will also have to pay tax on the some of the rent you receive. Under the government's Rent a Room scheme you can earn up to £4,250 a year tax free. You don't have to be a homeowner to rent out a room but, if you are a tenant, you should check whether your lease allows you to do so.
So, if you have spare room in your home, taking in a lodger can be a good way to make ends meet. Do some research to make sure you know how much your household bills are and set a fair rent at which you can make a profit. Sharing is always a risk and, who knows, you could end up with a life-long friend!
Contact Westhill Insurance Services, today.