One useful way for homeowners to achieve the utmost potential of their own property is to rent a room out in their own house. If you can overcome the possible issues associated with sharing your private abode, this has several benefits and is not subject to same level of guidelines as with other methods of rental.
Individuals renting room in private properties are usually considered by the law as licensees or lodgers, so they don’t have the same level of legal protection as a usual tenant.
In particular, lodger does not typically have a fixed ‘six month period’ before their agreement can be over and lodger does not have the same security from sudden eviction, as residential tenants have.
Although not necessary, the homeowner should still have a proper agreement drawn up for the lodger. These agreements usually specify a notice period of one month and comprise other valuable terms to make sure the arrangement gets off to an appropriate start. There are various lodgers’ agreements drafted by professionals, made available online.
Letting a room in your personal property also has certain tax benefits.
Under the ‘Rent a Room Scheme’ the landlord can generally receive an added £4,250 tax-free allowance. On the other hand, you should always make sure that letting rooms out does not generate a liability for ‘Capital Gains Tax’ once you decide to sell your home.
Other Factors to Remember
Property owners should keep in mind some other useful factors:
- You will need to inform your insurer and lender
- If a lodger is claiming benefits you may need to seek out assistance from the Council as to how these are acquired
- Property owners will still have to ensure gas safety inspections annually and make sure furnishings abide by with the newest safety codes.
Houses in Multiple Occupation
It is possible for homes to be treated as HMOs (see previous topic) if there are more than two lodgers.
Table Of Contents
- Landlords Home Letting guide Intro
- Responsibilities Of A Landlord
- Landlords and Houses In Multiple Occupation
- Letting A Room In Your Own Property
- Contracts With The Tenants
- Pros And Cons Of Hiring A Letting Agent
- Landlord Letting Insurance
- Tenancy Deposit Schemes
- Evicting Tenants
- Difficulties That May Arise With Tenants