Rent a room for tax-free cash

So who to rent your room out to? Your first port of call of course should be your friends and family. Renting to them may be more ideal than a stranger, providing you can live with them. But at least you don’t need to worry about not knowing someone.

But if you must rent to someone you don’t know, the location you live should give you a good idea who may be interested in renting your room. Such as:

Depending on what your room is currently, or was previously used for, you may want to think about furnishing it for ‘rent a room’ use and perhaps re-decorating.

Which means you don’t have to go overboard, but if the room is neutral in decor and contains the necessary amenities then it is likely to appeal to a greater amount of potential lodgers.

Cheap and cheerful furnishing

If your spare room is currently unsuitable for lodgers to move into, furnishing it can be easy and cheap. You may even be able to get things for free, but make sure they are in good condition before you buy them.

Sites like:

• Gumtree
• Snaffleup
• Freecycle
• Freegle
• NextDoor

All these offer free stuff, you just need to be able to pick the items up and take them home.

You’re unlikely to be able to furnish the whole room from such sites, and even if you do, it won’t match. But even if you manage to get a bed, some drawers or a desk, at least this will help towards the cost.

For items that you don’t want or can’t get secondhand, you can pick up simple, co-ordinating furniture relatively cheaply from places like Ikea,

• Amazon
• Furniture Outlet Village
• Ebay
• Argos.

Don’t forget that any expense you have when it comes to furnishing the room will eventually get covered by the rent paid by tenants. You can also put some of it against your income reduce your tax too.

Think about what you’d like if you were renting a room somewhere. Include basics such as:

• Wardrobe
• Chest of drawers
• Bedside cabinet or shelf
• Desk and chair
• Kettle
• Mini fridge

This will help people feel at home and make the most of their space.

If you are providing a ready furnished room, you will want the contents protected under the house insurance should anything happen to them through theft or fire, for example.

This is fairly simple to do:

• First, if you live near to a university, college, ask if you can put some notices around campus.
• Secondly, use sites like

To advertise for free.

• Also, don’t forget your own social media pages. Facebook Groups are particularly good for this.
• Failing these, you could advertise in your local newspaper or put an ad in your newsagent’s window, although both of these will cost you a small fee.

Unless you manage to rent your room out to a friend or acquaintance, you are ultimately inviting a stranger into your home to live with you. Ask potential tenants for some references before you give them the keys. Ask for at least two.

These will ideally be previous landlords and workplace references.

Take the time to call them up by phone instead of sending them an email. You’ll be able to get an idea of their authenticity a lot easier if you actually hear their voice.

For previous landlords, you may want to ask some of the following questions:

• What was their address? Use this to check that the reference is actually who they say they are.
• Did they pay their rent on time?
• Did you receive any complaints from neighbours?
• Were you happy with the way they looked after the house?
• Would you rent to this lodger again?

For workplace references, you may want to ask some of the below questions:

• When did they start working for you?
• What is their position?
• What sort of hours do they work?
• Are they full or part time?
• Do they get paid on a weekly or monthly basis?

This will ensure that the lodger is telling you the truth and ensure that their rent will be paid.

It’s important to have a contract in place so that there is a written agreement between the two of you. And you can refer to this in the event that anything goes wrong.

• You will need to state the rent amount per week or month, when it is to be paid, whether it is to be paid in cash or by direct debit.
• Which bills are included and how non-included bills will be paid (do they pay 25% of the electricity bill? for example)
• How much notice each side needs to give for the lodger to leave. The legal minimum is one pay period or 28 days, whichever is longer.
• It is reasonable to ask for about a month’s rent in advance. This can also act as a deposit in case of damages. If the lodger decides to move out, and there are no damages, then the deposit can be given back.
• It is a good idea to lay down some house rules in the contract. If you work shifts or have young children, your lodger can’t expect to be up all night watching TV loudly or stumbling in from a night out.
• As silly as it seems, you may want to make it clear that you expect them to tidy up after themselves, it is your house after all.
• If they have any pets, but it’s always a good idea to set some rules on this.
• The same goes for smoking, you may be happy for them to smoke, confine it to their room, or go outside.
• If you have difficulty with them, such as the lodger being continuously late with their rent or they disrespect your home, you can offer a warning. But if trouble continues, they need to leave.
• It will also be a good idea to get next of kin details from your lodger. Just in case.

How to get paid

Cons

If you like your privacy and can’t bear the idea of sharing your bathroom and kitchen with a stranger, then renting out a room is probably not for you.

Lodgers do have a right to occupy the other rooms in the house and also to invite guests over, at least not without your approval. So if you’re not a people person this might be difficult.

But bear in mind that you could gain a lodger who simply likes to keep themselves to themselves and spends most of their time in their room. Screen potential lodgers properly and everything should be OK.