Right now, a lot of people are working from home. Some people are starting their own businesses from their home. Maybe you’ve considered these options for yourself. Have you also considered making your home your business? Here’s what you need to know.
There are three main ways to rent out a property
You can rent out a whole property as a residential home. You can rent out a whole property as a short-term let (e.g. Airbnb). You can also rent out a part of your property. This can mean taking in a lodger. There are, however, plenty of other options. For example, you could rent out your garage or driveway for parking space.
Letting out your own home for someone else to live in is really only an option if you’re going away for an extended period. Maybe you’re working or studying abroad. Even then you might want to look at the short-term lets market instead. This can bring in a very good income and make it easier to get access to your home if you need it at short notice.
If you want to live in your home while you’re letting it out, then, obviously, you’re looking at letting out a part of it rather than all of it. You can, however, generally still choose between short-term lets and long-term lets. This means that you could make some extra money from your property without having to share it all year round.
You need to know the law
Laws change from place to place and they can also be updated. This means, firstly, that you need to inform yourself of the law when you start your business. Secondly, you need to make sure that you keep yourself informed of any changes. This doesn’t have to be complicated, it does, however, take a bit of organization and commitment.
You also need to think about your service contracts for example your mortgage and insurance. They may have rules about letting out your property.
Your property needs to be safe
Again, the actual laws on this will vary, but remember that, in this context, laws are minimum standards, not targets. The general guideline is that you want (and need) to do everything possible to keep your house safe - and back it up with paperwork.
This goes for both the outside and the inside of the house. If you’ve been putting off exterior maintenance and repairs, you need to get them done. Scaffolding may be an eyesore, but it’s safe for everyone (as long as you make sure that there are regular scaffold inspections).
Anything you need to do on the inside of your property, you should probably be doing anyway. For example, you will need to think about hazards such as fires and what you can do to protect people against them. All of this will benefit you too.
Think about who your tenants will be
There are three main groups of people who want short-term lets. These are holidaymakers, business people and students. The market for long-term lodgings is much broader. That said, students and young adults do make up a large proportion of it.
Which groups of people will be interested in your home will generally depend on three factors. The most important is where you live. The others are the time of year the property is available and the way the property is presented. There may not be much you can do about the first two. There is, however, a lot you can do about its presentation.
Presentation means more than just decor, although this is obviously important. It’s more about general lifestyle. There are some features which are expected, or at least desirable, regardless of your intended tenants. For example, most people value a decent internet connection and access to laundry facilities.
There are others, however, which appeal more to specific groups. For example, business people and students tend to value workspace and cycle storage. Holidaymakers, by contrast, tend to value high-end leisure facilities, such as hot tubs and home cinemas.
Highlight the benefits of your local area
Remember that a potential tenant won’t necessarily know your local area the way you do. In fact, they probably won’t. Make sure you point out anything that could interest them. In particular, highlight anywhere they can get food, drinks and essential supplies. Also, highlight the key local transport links including cycle lanes and parking facilities.
Again, think about your likely tenants and what they are likely to be doing. For example, explain how easy it is to get from your home to key business destinations/the local university and/or the city centre. You might also want to think about mentioning any day trips around your local area and the different options for making them (e.g. private car or tour).
Regardless of your intended market, always highlight any public green spaces in your area. This can be anything from parks, to public sports grounds to nature spots. Canal walkways are also worth a mention. Many people love to relax by taking a quiet stroll so knowing that there’s green space nearby is often a huge benefit.
Consider getting extra help
Letting out your home can bring in some useful extra income. What’s more, it may even be tax-free. For example, in the UK, the rent-a-room scheme allows you to earn a tax-free income of up to £7,500 from letting out furnished accommodation in your home. You could use some of this extra money to get help to deal with the extra work of being a landlord.
Short-term lets tend to generate by far the most work. This is partly because rooms usually need to be turned-over more quickly and partly because guests typically expect hotel-like standards. In fact, some professional short-term landlords have higher standards than even mid-range hotels.
Taking on long-term lodgers can be less full-on. You can reasonably expect them to take care of their own rooms. There will, however, inevitably be extra cleaning around the home and this can lead to friction. Just getting in a cleaner can make life easier on everyone.
Have you ever made an income from your home?
Liz x
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