The number of live-in landlords is increasing and with the possibility of earning up to £4,250pa tax-free it's easy to understand why. But it's not just free money, could you really share your home with someone else?
I was talking to a very ambitious and very young lady yesterday about her plans to build a sizeable property portfolio and retire by the age of 40. I smiled. She was quite inspiring and I can absolutely see her being successful. Sensibly she plans to wait until the right opportunity comes along for her first property rather than just finding the best opportunity right now, but in the mean time she wants to raise as much money as possible to increase her deposit and minimise her mortgage. Again, very sensible.
One of her ideas for raising capital is to rent out a room in her flat. With individual rooms in an around Enfield renting for anything between £350 and £600pcm and with up to £4,250 available tax-free this is quite an attractive proposition! In fact it’s so attractive that in London, the number of live-in landlords has doubled since 2011.
Demand is definitely there too, I receive a high number of calls from people looking to rent rooms and those calls tend to be from people who are more mature than you’d expect. In fact the average age of a lodger is 31, so not the young person living away from home for the first time who doesn’t know how to use a washing machine and believes in the toilet roll fairy!
There are also people who just want to rent somewhere from Monday to Friday for work purposes and escape back to the country for weekends, a great idea for Landlords who want weekends to themselves.
However, in addition to checking for any restrictions in her mortgage agreement and contents insurance, and reminding her that she would lose her 25% council tax discount, I had to ask this lady whether she could realistically see herself sharing her home with someone else. Queuing for the toilet, sharing control of the TV remote and giving up half of your bathroom space for someone else’s lotions and potions may sound trivial but………..
If you’re interested in renting out a room in your home, consider it carefully and make sure you do your homework first. Always fully reference any prospective lodgers and make sure you are using a valid lodger agreement.
Contact Belvoir Enfield for more information about successfully renting out a room in your home, letting your investment property, or starting and growing your property portfolio.