Rent a room to a lodger, it’s great!
Hello again all you fellow living intentionally people!
In today’s post, I want to discuss my experience (along with the Mrs) of renting out a room in our house to a lodger. We started renting a room to a lodger in September 2021. Our current lodger is due to move out at the end of August so we are in the process of searching for our next lodger.
The way I want to structure the discussion is to ask typical questions that people ask (or that we asked ourselves) about the prospect of renting out a room in a house you live in as your primary residence.
Why do you want to do it?
Well, a few reasons really. We obviously want to bring in a little additional income so this helps (especially with inflation raging higher and higher!) and we also like to meet new people. We bought a big house last year and thought that it might actually be a cool thing to rent out one of the rooms.
It made sense as there is only two of us and we thought it would be good to let someone else make use of the additional space. Having someone else around also brings some more interesting discussions to the house - especially considering we both work from home now and rarely see our colleagues.
The house we live in has the following space:
4 bedrooms
2 living rooms
Kitchen/ diner
Main bathroom (with bath/ shower)
Downstairs toilet
Garden with shed
Our house is a good size so it doesn’t really feel too imposing when a lodger is living here. Having 2 living rooms really helps. If they just want to chill on their own or we want to, then we can just go into separate spaces. We also find the kitchen/ diner is a great place to socialise if we do want to be more social as we have quite a big table in there.
Although, depending on your personality and how well you get on with the lodger, it could still be comfortable living in a smaller place.
How has your experience been so far?
Overall, our experience has been great. So far, we have had 2 lodgers - both young men.
Our first lodger was a PhD student and was desperate to find a place at short notice. He had moved back to London during lockdown and had been asked to come back to the University to do in-person lectures. So he was stressing out and needed to find a place quick! He also made clear at the beginning that he wanted to be closer to the city centre and that he would prefer if the rental period was relatively short if possible.
Since this was our first time inviting a lodger into our home, we were open to the idea of starting out with a shorter term just to test the water and see if this was going to be right for us. We therefore agreed to rent the room on a 3 month fixed term and rolling 1 month notice contract thereafter.
He stayed from September to December 2021 (4 months) and we barely saw him. He would get up very early (around 6am) and go to the gym before going to University. He would then come back from University at around 9pm most nights and wasn’t keen on being too social. I don’t think we did anything together outside of the house. That was fine for us, we would have been more social had he wanted to be but respected how he lived his life. Only negative for us was that he did not give a full month notice and wanted us to let him off the hook with paying a full month rent at the end. This was not ideal but would probably have been acceptable if he had gone about the situation a bit differently. When we suggested he should pay a full month from the day of handing in the notice, he went defensive straight away and pleaded to the fact that he was a poor student and could not afford to pay whilst paying some rent on his new place. We did give him some money off but also thought that he should have remembered that he had a contract with us before signing a contract with his new landlord.
Our second lodger (and current lodger) is a Web Developer and has been living here since January 2022 (8 months). We hit it off straight away with him. On the first night we broke the ice by going to one of the local pubs. We realised we had a lot in common and had a great time. I think he really appreciated the fact that we were very welcoming since he didn’t know many people in the area.
He mainly worked from home (and so do we) so we were able to have regular chats throughout the day and on evenings. Never once did it feel awkward. I also went running, played squash and we went for countryside walks quite regularly with him. I would say that now we have become quite good friends and I expect that we will keep in touch - he is a really cool guy. Particularly in the winter we spent many nights with the log burner on having general chit chats about life over a cup of tea. The only reason he is moving out is that he wants to move in with his girlfriend. It is a pity really as he has been great.
Both lodgers were very clean and respectful towards our house. This is really important to us. We are only interested in renting a room in our place to people we genuinely think we could get along with.
How did you write a contract?
We used a standard contract template produced by the National Residential Landlords Association (NRLA). The contract we used is one which is suitable for renting out a room to a lodger. The agreement is called an Excluded Tenancy Agreement. The standard template that the NRLA have produced seems to cover all basis and we have not noticed any gaps in it so far.
Where do you advertise the room?
We used a website called SpareRoom and found to be very user friendly. Both prospective housemates and rooms can be posted on the site. For our room, we described the place and gave a brief description of ourselves and our interests. We also included photos of ourselves, the room and the house as a whole.
The prospective housemates also normally write a description of themselves and post pictures to show you what they look like. Normally we have found that you can filter down the people that would be suitable or not just based on this information. Luckily we have not had any problems with anyone that has come to view. Normally it is the opposite, you end up speaking to people for ages about their interests - it can be pretty interesting actually. We even had a guy who’s girlfriend worked for NASA!
Typically, we have found that we have been able to do viewings and agree to rent out the room to someone within 2 weeks from posting the advert.
How much have you made so far?
As I said above, we have rented out the room to two lodgers so far. The first rented the room for 4 months at a price of £550 and the second rented the room for 8 months for a price of £530. So in total we have made about £6,440 in our first 12 months.
This is not straight profit as the housemates obviously use water, gas and electricity that needs to be paid for which is over and above what we would normally use. We include all bills in the rental cost. We find this makes it easier for both parties. You should also remember that you will need to add the lodger to the home insurance so that will increase it slightly as well.
Overall, we have found the income we get from renting the room out is relatively effortless. We live in the house so if there are any problems that need to be fixed we would have to sort those things out anyway. Otherwise, the two lodgers so far have been easy to get on with, respectful and very low maintenance so it has been great.
Do you need to pay tax?
Fortunately, no we don’t need to pay any tax on this income. The UK government has a Rent a Room Scheme which allows you to make up to £7,500 per year without paying any tax on this income.
Do you think there are any negatives?
There are some drawbacks and slight inconveniences that come with renting a room in your house to a lodger.
It makes it more difficult for your family and friends to stay over. The lodger needs to be OK with you having your family and friends staying over (something you should mention when they come to view the place if you intend to do it). Your family and friends also need to be comfortable staying when you have a lodger living in your place. It slightly complicates things. Our family live far away so don’t visit very often. So for us, the inconvenience does not really outweigh the benefits. It just means we try to make more effort to visit them more often.
You need to share your home with someone you don’t really know. They might not have the same care and love for your house that you do. That can be difficult. We realise that we are getting paid for the lodger to live there so realise that we need to clean and tidy more than they are expected to. We are fine with this and it is not something we dwell over.
You need to have trust in the person that is living in your place. Say you go on holiday, they will be in the house on their own with keys to the property. You need to make sure they are trustworthy. It can be difficult in the beginning to be OK with this. Don’t rush to rent a room to a person that might not be a great fit.
Thankfully we haven’t had many negative experiences but maybe we can provide an update when we are a few more years down the road.
What questions do you ask when they come to view?
I think when people come to view the property it is important that you try to get to know them as best as you can. I know this can be hard because they will only be there for a short period of time. However, you should try to get a good feel about how they are as a person and whether or not you think you would be able to get on with them.
From our perspective, things we want to know are:
Are they clean and tidy?
What are their interests?
What do they work as and will they need to work from home?
How soon are they looking to move in?
How long would they like to rent the place for?
Do they intend on having their partner stay over regularly?
Really you need to work out what is important to you. You should make sure they know what you expect. Otherwise, when it comes to living in your place, you could clash with them and feel trapped in your own home. That’s why for us, it is important that the person is right. We don’t want to end up living with someone that makes us feel uncomfortable. That said, there are lots of really nice people out there and I would highly recommend renting out a room in your house if you are considering it.
P.S. an easy way to see if someone is clean and considerate is to watch to see if they take their shoes off when they come into the house.
