Letting out a spare room in your home can be a great way to earn some extra cash, but there are some responsibilities that go along with being a live-in landlord. So if you’re considering turning your spare room into an earner, check out this handy guide for everything you need to know!
You must live there
You are only a resident landlord when you actually live in the property in which you are letting a room. Of course, you don’t have to be there all the time; as long as it is clear that the property is your principal home and you intend to return after brief periods away (ie: by leaving your belongings there) then you are considered a resident landlord.
You have a tenant or a lodger
The main difference between a tenant and a lodger is to do with the ownership of the space. With a lodger you can enter the rented room at any time, and move them to another room if you wish. A tenant, on the other hand, is granted sole access to the rented room, meaning they can put a lock on the door and you, as the landlord, must give 24 hours’ notice in writing before entering it.
You have more control
As a resident landlord, many of the major decisions are left up to you. You decide what to charge and whether to include fees for utilities and council tax, and you can ask for a deposit but do not have to put it in a government-protected scheme. Resident landlords don’t need to have a written agreement, although it is advised, and you should provide a rent book if rent is paid weekly. Resident landlords also have more control over ending a tenancy: you don’t need to go to court to evict a tenant, you only need to provide ‘reasonable notice’ for them to leave. This notice is usually the length of the payment period, so if they pay rent monthly, you must give one month’s notice.
You may need permission to rent
If you own your property outright, you do not need to get approval before letting out a spare room. However, if you still have a mortgage or are renting your property, you will need to gain permission first. Check with your mortgage-lender to see if they are happy with you letting, and bear in mind that most rental properties forbid subletting to other people. Of course, if you do get the go-ahead, it’s always a good idea to ask for references from any tenants before they move in.
You must meet certain standards
There are some basic standards that it is up to you as a live-in landlord to maintain, such as providing access to kitchen, washing and toilet facilities, and keeping the property safe and in a good state of repair. This includes getting gas and electricity safety checks, and meeting the requirements for an HMO (House in Multiple Occupation) if taking in a tenant will turn your property into one.
You could incur expenses
Taking a tenant into your home could increase your home insurance, so make you sure you tell your insurance company before taking anyone in and decide whether you can afford it. As a resident landlord you will also be responsible for any costs for repairs to keep your property at the required safety standards, but you are not responsible for repairs necessitated by your tenant’s acts or failure to act.
You could benefit
If you do decide to take in a tenant or lodger, you could benefit from the government’s Rent a Room Scheme, which allows you to earn up to £7,500 per year tax free if you let out a furnished room or floor in your home. If you earn over this threshold, you can still opt into this scheme when you complete your annual tax return.
Convinced that being a resident landlord is for you? Find out more from the government’s Resident Landlord Guide.
Are you a landlord looking to let in Bristol? Contact Gough Quarters today to find out more.
All images courtesy of Pixabay under CC0 Public Domain License