Renting a room in your own home is a great way to earn additional income and in many cases, it is tax free with the governments Rent a Room Scheme. This scheme allows you to rent one room in your own home tax free on income up to £7,500.00 per year. As long as you don't exceed this amount there is no need to declare it to HMRC.
You want to rent your room. Where do you start?
There are a number of Online platforms where you can advertise a room to rent in your own home. These platforms have tenants searching for rooms in all areas. Here at RoomsForLet we are specifically focused on rooms to rent in shared houses, HMO’s etc. with the majority of rooms provided by private landlords and home owners.
You can register with us here and post an advert free of charge. Posting an advert for free will give you a good idea of the response you may expect for your room. You can also check for any registered tenants who may match your requirements and receive instant notifications of new tenants registering or updating their profile in search of a room like yours.
When posting a free advert, this will be available in our search results, you will receive enquiries from potential tenants and receive notifications via email and SMS of new and updated tenant profiles. You are unable to respond to enquiries and would need to upgrade for a small fee to do this. However, you can monitor any response without payment and make an informed decision.
What should you consider when renting your room?
The main issues to consider when renting your room would be your own and your tenants safety.
The property firstly should be in a good and safe state of repair and the room habitable. You should be aware of any legal requirements and regulations. Local councils may have differing rules so ensure you are familiar with them.
There are generally less regulations for letting a room in your own home when you are a resident landlord. Resident landlords may have more freedom to end a tenancy agreement early as there is a possibility the relationship between landlord and tenant may break down. However, it is important you familiarise yourself with any laws and legal requirement as this article does not provide an authoritative interpretation of the law.
Familiarise yourself with any safety regulations. This can include annual gas and electricity certification. PAT testing for appliances owned by the home owner/landlord should also be carried out. Whilst it may not be a requirement in your own home it is always prudent to have these checks in place in any event.
Screening Tenants
It is important to have a thorough screening process in place for potential tenants. This may include credit checks along with references from previous landlords and employers. It is also important to carry out ID checks and for foreign nationals, Right to Rent checks.
Whilst this may seem daunting, there are affordable options Online by organisations to check these details on your behalf. When renting a complete property you may have an estate agent or property management company carry out these checks for you. However, with renting a room in your own home, this isn't usually possible.
The NRLA, among others, provide tenant referencing services with a Full Tenant Check costing £26 (June 2023) and includes many items such as credit checks, previous reputation as a tenant, ID verification, employment verification and more. Making use of these services is very worthwhile.
Determining a fair rent
The rent you charge will depend on many factors and is difficult to give a general idea. It can be affected by location and standard of the property, size of the room being rented, facilities available in the property such as ensuite, WiFi, TV services and more.
You may also decide to include bills such as gas, electricity, broadband in your monthly rent amount. This will obviously increase the rent but will mean your tenant will know exactly how much is due each month. Others may decide to charge an additional amount for bills as and when they arrive with a pre-agreed amount or percentage.
To determine an appropriate rent amount, you can research similar rooms in your area and decide what is a worthwhile amount when considering things such as loss of privacy, covering your own increased outgoings etc. Take a look at some rooms in your area on RoomsForLet here.
Do you need a tenancy agreement
Regulations are different when renting a room in your own home to renting a complete property where generally an Assured Shorthold Tenancy (AST) is required. However, you should check your situation to ensure you are abiding by the relevant laws.
None the less, it is always a good idea to have a written agreement in place which sets out the terms of the Tenancy. This can protect both yourself and your tenant and remove any potential conflict or confusion. The Tenancy agreement may include details such as the duration of the lease, rent amount and what it includes such as bills, payment schedule, security deposit, house rules, and any additional terms you wish to apply.
Will you require a security deposit?
It is always recommended to require a security deposit. Decide on the amount you will require from the tenant; a normal amount would be one month’s rent. The deposit serves as protection against any damages or unpaid rent. Ensure you understand the laws regarding security deposits and protect them in a Deposit Protection Scheme such as with DPS or MyDeposits.
Insurance
Check with your insurance provider to see if you need additional coverage as a landlord. A standard homeowner's insurance policy may not provide adequate protection when renting out a room. Landlord insurance can help protect against potential liabilities. Also consider an additional Legal Protection cover for your policy. You should also contact your mortgage provider to seek permission to rent a room in your own home.
Rent My Room. Other things to consider
Establish clear lines of communication with your tenants. Make sure they know they can approach you with problems and possible maintenance issues. Set boundaries regarding noise levels, guest policies, and any restrictions you want to impose on the use of common areas. This should also be included in the tenancy agreement.
Ensure that the room and the rest of your property meet safety standards. Install functioning smoke detectors, provide secure locks on doors and windows, and address any potential hazards. It's essential to prioritise the safety of your tenants. With door locks to bedrooms, it is good practice to install be thumb turn locks which don't require a key on the inside and fire rated so they are easy for the tenant to unlock in the event of emergency.
Remember, it's always a good idea to consult with a legal professional or local housing authority to ensure you comply with all relevant laws and regulations when renting out a room. You can also discuss with your local Council housing department or Citizens Advice Bureau who should be able to offer advice or at least point you in the right direction.
Whilst the safety and security of the tenant is of the utmost importance you must also consider your own safety and security. Are you a single female or a family with young children? Whilst any tenancy checks can allay many fears about the tenant in question you should always consider the effect any loss of privacy may have on yourself and family so careful consideration should be given.
Before entering in to a tenancy agreement you should always meet the tenant in person. First impressions can be very important and sometime this can mean rejecting an application even when Tenancy Checks come back clear. You need to make sure you are comfortable living with any potential tenant before making a final decision as they will be sharing your home.
Whilst there may be some concerns initially, renting a room can also be a very rewarding and rich experience. It may be that you are a single person and a tenant could offer some companionship.
Additionally, tenants of other nationalities and cultures can be of great mutual benefit whereby you benefit from increased income and the company of others and they benefit from integrating with a family or person of a new culture. It maybe you can help with letting a room to a refugee and offering sanctuary to someone from a disadvantaged or war-torn area. Whatever you decide as your potential tenant, it is important they fit in to your lifestyle.
As mentioned above, you are able to rent one room in your home under the Rent a Room scheme and have no liability for tax up to £7,500 rental income per year. You can find out more about the Rent a Room scheme here.
Finally, if you are considering renting your room, please take a look at our Rooms Wanted section. Here you will find listings in all areas of the UK of tenants looking for rooms. Check to see if any meet your requirements. New tenants are registering all the time and will also show in the 'Best matches' section of your account once you are registered. Please register here to begin adding your rooms to rent.