As the cost of living rises inexorably, households inevitably search for additional income streams to supplement their own revenue streams. We look at some innovative ways to squeeze more money out of your biggest asset, some which could net you thousands of pounds a year with minimal effort.
The Government’s Rent-a-Room scheme might not be the most publicised of their ‘property crisis’ solutions, but it does provide a very handy tax break of £4,250 for income earned from lodgers. Anything earned above that is subject to income tax.
If you’re looking for a full time lodger, sites like Gumtree.com, Spareroom.co.uk and Easyroommate.co.uk can be of assistance. Many are just looking for weekday lodgings (perhaps saving on a lengthy commute) which can be perfect for households with an extra bedroom – retaining privacy and peace and quiet on the weekends whilst gaining some extra income during the week.
Judy Niner, founder of MondaytoFriday.com which specialises in weekday lodgers, said:
“The number of people lodging in the UK doubled to almost a million last year, so for homeowners looking to make money it’s a great way to make extra tax-free cash,”
Certain boxes must be ticked before you can take on a lodger:
– Ensure that your mortgage provider is informed
– If you claim single person council tax discount, be sure to let your council know.
– Ensure that the room is furnished and actually within your home (not a self-contained annex) – this is essential to qualify for the tax break.
– You are now responsible for another person’s safety – ensure you have a gas safety check every year and that your furnishings, fixtures and fittings are all safe and legal.
– Ensure that you are appropriately covered with your contents and home insurance provider.
Of course, the downside is sharing your space with another person – although for some retirees this might even be a welcome benefit. Do make sure you procure appropriate references from previous landlords and employers.
Rent your parking space
Parking charges are becoming ever more extortionate, particularly towards the centre of town. With ever more cars congesting the roads each year, parking spaces are at an all time premium.
If you have a driveway of your own with space for another car, it is surprisingly easy to rent it out to motorists in the area. The closer you are to the centre, the more you will make.
Sites like Parkatmyhouse.com, ParkLet.co.uk and YourParkingSpace.co.uk can make you around £40 a week – booking up your space and handling the money for you. That might not seem a lot, but it equates to a £2080 windfall over the year.
Do be careful though, there are no tax breaks for this sort of income so it will need to be declared in your tax return. If you don’t do one, do contact HM Revenue & Customs and let them know. As with lodgers, be sure to inform your insurers – they are very particular about knowing such things and not informing them can void your cover if you ever came to need it.
Rent your spare space
Lots of people have a garage they barely use, or a spare / box room that lies empty throughout the year. At the same time, lots more people need storage space for their belongings and don’t want to pay high professional storage fees.
Sites like Storemates.co.uk and Storenextdoor.com bring these two groups of people together and can net those advertising their space around £70 per month for a loft, and as much as £120 per month for a garage – those with both to rent out could reasonably gather £2520 a year.
It is usually free to advertise your storage space – with the websites taking their cut when you get a booking in the form of an administration fee equivalent to the first two weeks of your listed storage price or a fee worth 23% of the monthly rental price.
With a little micromanagement of your home, you could add thousands to your yearly income with very little effort.
LCB / SRJ 03/07/2013