Want to make money out of the Royal Wedding and the Olympics? Here’s how to go about letting a room in your home.
With the Royal Wedding just a few weeks away, homeowners are eyeing up the opportunity to let out rooms and flats to tourists, realising there is some serious money to be made.
According to Findaproperty.com, one in four Londoners is considering renting out all or part of their home for the big day on 29April 2011.
And with less than 500 days until the start of the 2012 Olympic Games, some Londoners will also be using the Royal Wedding as a trial run for next summer’s event.
“It’s common knowledge that London’s hotels will struggle to accommodate the hundreds of thousands of visitors for the Olympics,” says Joanna Doniger, from letting specialist Accommodate London. “Homeowners who are willing to let their properties will play an essential role in making the games a success.”
Letting not limited to London
But it’s not just Londoners who can benefit, as Olympic events are taking part all over the country, from rowing near Windsor and sailing in Weymouth, to football in Coventry, Manchester, Glasgow, Newcastle and Cardiff.
At the same time, there are a whole host of other events which take place every year creating peaks in demand for accommodation, such as Cowes Week, Wimbledon and the Edinburgh Festival.
Choosing where to advertise
If you are planning on letting your home, you need to think carefully about where to advertise.
Sites include Gumtree, Crashpadder and Spareroom or, for high-end properties, Accommodate London.
When choosing a site, you need to read the terms and conditions, as some charge a listing fee but don’t guarantee a booking, while others are free of charge, but offer no security.
With Crashpadder, for example, it is free to list your property, but you have to pay a 10 per cent fee when you receive a booking, while Accommodate London, charges 15 per cent of gross rent.
Marketing your property
To improve your chances of a successful let, you need to create the best advert you can.
“Take the time to write a great listing,” says Stephen Rapoport, founder of Crashpadder. “Make sure potential guests don’t only know what your place looks like, but help them to picture being there. Add plenty of details about the space, amenities, and the local area.”
How much money you can make
While potential landlords will hope to make a tidy sum from renting their home, you do need to be realistic about the amount you charge.
“Look at the alternative lettings that are available and make sure you are competitive,” says Rapoport. “Don’t be fooled by high hotel prices, as while a handful of tourists will be prepared to pay £400 a night for a Park Lane Hotel, this doesn’t necessarily mean this is a fair price for your space. Around £50-£70 per night for a double room in London is about right.”
That said prices will, of course, depend on the size and condition of your property, the location and the available facilities, and some landlords could rake in hundreds – or even thousands – of pounds a night.
Tax implications
If you’re thinking of renting a spare room, familiarise yourself with the Rent-a-Room scheme. Under the scheme, you can earn up to £4,250 a year tax-free if you rent out a room in a residential property.
This applies if you let furnished accommodation – a room or entire floor of your home – to a lodger who pays to live in your home, sometimes with meals provided, and who occasionally shares the family rooms.
You can also use the Rent-a-Room scheme if your home is rented, as you don’t have to be the owner.
However, the scheme does not apply if your home is converted into flats that you rent out, if you let unfurnished rooms in your home, or if you let your whole home. In these cases, you need to declare the rental income to HMRC and pay tax in the normal way. For more information go to thedirectgov website
Safety first
As a homeowner, you need to take steps protect yourself and your home, and this means vetting all tenants thoroughly beforehand.
“It’s important you are totally comfortable having the guests in your home,” says Rapoport. “Make sure you know what to expect about your visitors, such as cleanliness, bed-times, smoking and diet.”
Lock all valuables away, and check whether your home contents policy covers accidental damage.
Contact your lender and home insurer
Before letting your home, you need to get in touch with your mortgage lender and your insurance company.
Some mortgage contracts may have clauses which preclude sub-letting, so you will need to check this.
Your insurer may also have to arrange extra cover which will mean having to pay an extra premium.
