From beating taxes to choosing top tenants, here’s some smart landlord advice to help you make the most of your spare room.
1. Pay no tax with the new Rent a Room scheme
In April 2016, the government’s new Rent a Room scheme kicked in. This lets you earn up to £7,500 of income from lodgers tax-free. Best of all, the income is automatically tax exempt, meaning, that as long as the combined income of all your short term rental tenants is less that £7,500, you don’t have to declare the income! So why wait? Go find a short term tenant now!
2. Brush up on the obligations of a resident landlord
If you are renting out part of your main house, that makes you a resident landlord. This give you certain rights and duties that are different from being a non-resident landlord. Check here for an outline to make sure you remain within the law and know what you’re getting yourself into!
3. Don’t lower your deposit
Contrary to popular intuition, the amount of damage a bad tenant can do to your property is not directly proportional to the length of their tenancy! If you are only letting out your room for a few weeks, it can be tempting to lower or even forgo a security deposit. But this is a bad move and you could end up paying dearly for it later on.
4. Make sure your advert is appropriate for short term rentals
There’s a subtle but important difference between writing a regular room advert and a short term rental advert. From how precise you are with the dates, to how you split the bills, we’ve covered all the difference in our post on how to write a short term let advert.
5. Learn what you like – and choose it again
As the landlord of short term tenants, you’re going to see a high tenant turnover. This gives you the chance to recognise what you like from tenants so you can keep choosing those characteristics again and again. Had a few bad experiences with students? Maybe give them a miss next time. Constantly evaluate what it is that makes your ideal tenant and then go for that in future.
6. Plan ahead to minimise vacant periods
For long-term landlords, finding a new tenant is probably the most stressful time of year. But with short term rentals, you’ll be turning around several tenants every year. To minimise the amount of time your spare room spends vacant, you need to be lining up your next tenant way before the current one has moved out.
7. Consider putting on extra services
If people are moving in for a few weeks, they probably just want a nice place to live until they get something more stable arranged. While their lives are so up in the air, tenants might be grateful (and very willing to pay) for things like a laundry and food services. If you can make £15 a week more for whacking a few things in the washing machine, then why not! It’ll help you stand out from the other short term rentals out there.
8. Keep an eye on seasonal events to cash in
Is the Olympics in town? Is it the busy summer tourist period? Is the city flooded with students on their August internships? All these things will influence demand for your short term rental and you should be bold enough to raise your rates accordingly.
