5 tips for taking on a lodger
Taking on a lodger can be a great way to utilise a spare room in your home to make some extra income. Read our top 5 tips on what you need to consider when renting out a room in your home.
What is a lodger?
A lodger is anyone who rents a room in your home and shares your living spaces, such as your kitchen or your bathroom.
It is always a good idea to have a lodger agreement in place if you intend to rent out a room in your home to someone. This agreement will set out the terms upon which the lodger can occupy your property. It will grant the lodger exclusive possession of neither the room they are renting nor your property.
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Check if you qualify for the ‘Rent a Room’ Scheme
The UK government’s Rent a Room Scheme enables you to earn up to £7,500 per year tax-free from letting out furnished accommodation in your home.
If you earn less than £7,500, the tax exemption is automatically applied. If you earn more than this, you will have to fill in a tax return and opt into the scheme in order to claim the allowance.
It is worth noting that if the income is shared between two people, the amount is halved to £3,750.
The scheme is only open to those who rent out a room to a lodger. It is not possible to use the scheme to rent out separate flats to tenants.
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Make sure your lodger is actually a lodger
Lodgers have much less legal rights than other types of tenants. Ensuring that you have a lodger and not another type of tenant, can make a real difference to how much notice you have to give them to leave and whether or not you have to go to court in order to evict them.
As a reminder, a lodger is someone who rents a furnished room in your main residence and shares a living space with you or a family member.
READ MORE: What you need to know about taking in lodgers
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Do your research on where to find a lodger
In the first instance, it is always worth asking friends or family if they know of anyone who is looking for a room to rent. Finding a friend of a friend to rent a room can save a lot of time spent putting up adverts or searching through websites and newspapers. Plus, you can be more confident already knowing (or your friend already knowing) the person who will be living with you.
You can also look online or in local newspapers for adverts from people looking to rent a room. Alternatively, you could place an advert yourself stating that you have a room to rent. Websites such as spareroom.co.uk are a good place to start.
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Make sure your lodger is suitable for your lifestyle
If you are someone who works a nine to five job and enjoys being in bed by 10pm with a hot cup of cocoa, living with someone who works in a bar and comes back late to listen to music may not be ideal.
Likewise, if your lodger is an early-to-bed nine to fiver and you like to have lots of friends over late into the night, the potential for tensions to rise is high.
Picking a person who is in tune with your lifestyle is key. If you can find someone who shares similar hobbies or interests, or with whom you have something in common, so much the better.
It may seem obvious but make sure you are happy living and sharing your home with this person on a daily basis. No amount of money earned from a lodger will make up for feeling unwelcome or unhappy in your own home.
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Ensure you have a lodger agreement in place before taking on a lodger
Having a written agreement in place is a simple way to ensure that both you and your lodger fully understand what you are entering into and that you are both protected if there are any problems in the future.
A Lodger Licence Agreement will set out the terms of the agreement between you (the landlord) and the lodger intending to rent a room in your property.
It will include terms such as how much rent they will pay, any additional services you offer (you may include laundry services, for example) and their charges, whether they can keep pets and the length of the term.
You can purchase a Lodger Licence Agreement template online from LegalPath.
READ MORE: Rent a room scheme - how does it work?